Asked by Sayuri Yamane on Jun 28, 2024
Verified
If TR > TVC but TR < TC, a firm would ________ in the short run and ________ in the long run.
A) operate; expand
B) operate; exit the industry
C) shut down; expand
D) shut down; exit the industry
TR
Total Revenue; the total receipts from sales of goods or services provided by a company before any deductions are made.
TVC
Total Variable Cost; the total of all costs that vary with the level of output produced by a company.
- Investigate the determinants for an organization's scalability, downsizing, or termination in the long-term.
Verified Answer
CB
Candace BeverlyJun 30, 2024
Final Answer :
B
Explanation :
If Total Revenue (TR) is greater than Total Variable Cost (TVC) but less than Total Cost (TC), a firm would continue to operate in the short run because it can cover its variable costs and contribute to fixed costs. However, in the long run, if it cannot cover total costs, it would exit the industry to avoid losses.
Learning Objectives
- Investigate the determinants for an organization's scalability, downsizing, or termination in the long-term.