The Firm's short-Run decision to shut down a shutdown refers to a short -run decision not to produce anything during a specific period of time because of current market conditions Exit refers to a long-run decision to leave the market The firm considers its sunk costs when deciding to exit, but ignores them when deciding whether to shut down Sunk costs are costs that have already been committed and cannot be recoveredThe Firm’s Short-Run Decision to Shut Down • A shutdown refers to a short-run decision not to produce anything during a specific period of time because of current market conditions. • Exit refers to a long-run decision to leave the market. • The firm considers its sunk costs when deciding to exit, but ignores them when deciding whether to shut down. • Sunk costs are costs that have already been committed and cannot be recovered