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BaLLatris [955]
4 years ago
9

By shutting​ down, a firm A. can avoid paying taxes on its previously earned profits. B. stops receiving revenue but continues t

o pay variable costs. C. stops receiving revenue and is stuck with its fixed costs. D. avoids its sunk costs as well as its variable costs.
Business
1 answer:
stiv31 [10]4 years ago
4 0

Answer:

<h2>C. Stops  receiving revenue and is stuck with its fixed costs  </h2>

Explanation:

Shut down means that a firm is temporarily suspending the production but not exiting the industry or going out o business and the firm would start production if the market improves. It is a short-run decision.  A firm that has been shut down generates zero revenue and doesn't incurs variable costs, but does incurs the fixed costs. Its profits is equal to the negative of fixed costs. R<em>ents and other business costs that remains constant regardless of the good and services produced is called fixed costs</em>.

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