Under what condition will a company decide to cease operations temporarily in the short term?

Show Answers

When fixed expenses are greater than income.If the business is operating at a loss.When the revenue does not cover the variable costs.If the overall costs surpass the total income.

Explanation

A company will shut down in the short run if it cannot cover its variable costs with the revenue it generates. Fixed costs are sunk in the short term, so the key factor is whether revenue covers variable costs.