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pirex pirex
wrote...
Posts: 634
6 years ago
Explain why shutting down and going out-of-business are different concepts.
Textbook 
Microeconomics

Microeconomics


Edition: 6th
Author:
Read 60 times
1 Reply
And if you call, I will answer
And if you fall, I'll pick you up
And if you court this disaster
I'll point you home

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wrote...
6 years ago
Shutting down means that the firm seizes production with the option of starting up production any time in the future. Going out-of-business is equal to exiting the industry. This involves reducing the amount of (the fixed input) capital to zero, which is not possible in the short run.
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