A firm should shut down in the short run if the market price of its product doesn’t cover its _____ of production.

A firm should shut down in the short run if the market price of its product doesn’t cover its _____ of production.

total fixed cost
average variable cost
average fixed cost
average total cost

Explanation
So long as a firm is able to cover its average variable costs, it will continue producing goods. It will be ready to forgo the recovery of fixed costs in the short run