Chapter 7.A, Problem 3TY

In order to maximize the profit, what decision do you think is the most important one? Can business making zero economic profit, but still keep running? And why?  Please provide a business example to explain the concept 'diminishing marginal return'.

“Even if a firm is losing money, it may be better to stay in business in the short run.” Is this statement ever true? Under what condition(s)?

If a firm’s current revenues are less than its current variable costs, when should it shut down? If the firm decides to shut down, should we expect that decision to be final? Explain using an example that is not in the book.