A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a year. Should the firm produce or shut down in the short run. Suppose instead that the firm has a fixed cost of $35,000 per year. Should the firm produce or shut down in the short run?

Answer rating: 100% (QA)

To determine whether the firm should produce or shut down in the short run we need to compare the fi... View the full answer