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Pick the situation in which we would expect the firm to shut down:
a. A firm is in a year-long lease conrtact for its office headquarters. The firm's revenue is greater than the cost of all variable inputs, but it still can't generate a profit due to the cost of the lease.
b. A heat wave increases the demand for ice-cream, which allows Joe to charge over $10 per ice cream cone. However, supply chain issues cause the prices of his inputs to skyrocket, which puts his variable cost above his total revenue.
c. Jimmy sells fireworks door to door. He rented a van from his friend at $50 per day, but the contract they signed said that Jimmy had to rent the van for at least a month. Jimmy knows that he'll spend an average of $30 per day on fireworks and he'll make around $60 in revenues.


Sagot :

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