Rakesh Sahu
asked almost 3 years ago
1
0
Answer Now
Comment
Report
2 Answers
acharya
answered over 2 years ago
The concept is that if a firm can produce revenue greater or equal to its total variable costs, it can use the additional revenue to pay down its fixed costs. This assumes that fixed costs will still be incurred when a firm shuts down, such as lease contracts or other lengthy obligations. In other words, when a firm can earn a positive contribution margin
Important Note – Preparing for CA Final?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below –
For any questions Request A Call Back
narahari
answered almost 3 years ago
Interest of workers, if the workers are discharged. It may become difficult to get skilled workers later, on reopening of the factory. Also shut-down may create problems. In the face of competition it may be difficult to re-establish the market for the product.
