A firm that closes down will still incur - JAMB Economics 2022 Question
A firm that closes down will still incur
A
variable cost
B
fixed cost
C
total cost
D
marginal cost
correct option: b
Option B is the correct answer.
If a firm shuts down, it will not generate any revenue, and its variable production cost will be zero. This means that the firm's total cost of production is equivalent to its fixed cost. Nevertheless, the firm will still have to bear the fixed cost.
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