Question

In which circumstance is it most likely for a factory to shut down operations?

when fixed cost exceeds operating cost


when total cost exceeds total revenue


when marginal cost equals marginal revenue


when operating cost exceeds total revenue

Answer 1

the answer is when operating cost exceeds total revenue.

In determinign whether the company should shut down or not, operating cost play a more crucial roles compared to fixed cos and total cost.
Operating cost give you a minimum amount that company needed in order to operate, while it is very common for total cost to exceed total revenue at the beginning of a company operation.