If a firm shuts down in the short run,Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aprofits would be zero.blosses would equal its variable costs.closses would equal its fixed cost.dlosses would be zero.
Question
If a firm shuts down in the short run,Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aprofits would be zero.blosses would equal its variable costs.closses would equal its fixed cost.dlosses would be zero.
Solution 1
The correct answer is c. If a firm shuts down in the short run, losses would equal its fixed costs. This is because even if the firm is not operating, it still has to pay for its fixed costs such as rent, salaries of permanent staff, etc. These costs are incurred regardless of the level of output, hence they are called 'fixed'. Variable costs, on the other hand, change with the level of output. If the firm is not producing anything, variable costs would be zero. Therefore, the losses would equal the fixed costs.
Solution 2
The correct answer is c) losses would equal its fixed cost.
Here's why:
In the short run, a firm has both fixed and variable costs. Fixed costs are costs that do not change with the level of output, such as rent or salaries. Variable costs are costs that do change with the level of output, such as raw materials or hourly wages.
If a firm shuts down in the short run, it would not incur any variable costs because it is not producing any output. However, it would still have to pay its fixed costs because these costs are incurred regardless of the level of output. Therefore, the firm's losses would equal its fixed costs.
Solution 3
The correct answer is c. If a firm shuts down in the short run, losses would equal its fixed costs. This is because even if the firm is not operating, it still has to pay its fixed costs such as rent, salaries of permanent staff, etc. These costs are incurred regardless of the level of output, hence they are called 'fixed'. Variable costs, on the other hand, change with the level of output. If the firm is not producing anything, variable costs would be zero. Therefore, the losses would equal the fixed costs, not the variable costs.
Solution 4
The correct answer is c. If a firm shuts down in the short run, losses would equal its fixed costs. This is because even if the firm is not operating, it still has to pay its fixed costs such as rent, salaries of permanent staff, etc. These are costs that have to be paid regardless of whether the firm is producing or not. Variable costs, on the other hand, are costs that vary with the level of output. If the firm is not producing, variable costs would be zero. Therefore, the losses would equal the fixed costs.
Solution 5
The correct answer is c) losses would equal its fixed cost.
Here's why:
In the short run, a firm has both fixed and variable costs. Fixed costs are costs that do not change with the level of output, such as rent or salaries of permanent staff. Variable costs are costs that change with the level of output, such as raw materials or hourly wages.
If a firm shuts down in the short run, it will not incur any variable costs because it is not producing any output. However, it will still have to pay its fixed costs because these costs are incurred regardless of the level of output. Therefore, the firm's losses would equal its fixed costs.
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