In which circumstance is it most likely for a factory to shut down operations?

when fixed cost exceeds operating cost

when total cost exceeds total revenue

when marginal cost equals marginal revenue

when operating cost exceeds total revenue

Question

Social Studies

Anderson Harrington

20 July, 03:13

In which circumstance is it most likely for a factory to shut down operations?

when fixed cost exceeds operating cost

when total cost exceeds total revenue

when marginal cost equals marginal revenue

when operating cost exceeds total revenue

+4

Answers (1)

Know the Answer?

Soren Huerta · Answer 1

The answer is when operating cost exceeds total revenue.

In determinign whether the company should shut down or not, operating cost play a more crucial roles compared to fixed cos and total cost.

Operating cost give you a minimum amount that company needed in order to operate, while it is very common for total cost to exceed total revenue at the beginning of a company operation.

In which circumstance is it most likely for a factory to shut down operations?when fixed cost exceeds operating costwhen total cost exceeds total revenuewhen marginal cost equals marginal revenuewhen operating cost exceeds total revenue

In which circumstance is it most likely for a factory to shut down operations?

when fixed cost exceeds operating cost

when total cost exceeds total revenue

when marginal cost equals marginal revenue

when operating cost exceeds total revenue