Explain why shutting down and going out-of-business are different conc

Explain why shutting down and going out-of-business are different concepts.

What will be an ideal response?

ANSWER

Shutting down means that the firm seizes production with the option of starting up production any time in the future. Going out-of-business is equal to exiting the industry. This involves reducing the amount of (the fixed input) capital to zero, which is not possible in the short run.