A firm will shut down in the long run if its earning is

A firm will shut down in the long run if its earning is less than normal profit. In economics, normal profit refers to the minimum level of profit necessary to keep a firm in business in the long run. This includes the opportunity cost of the entrepreneur's time and capital investment, as well as any other costs necessary to maintain the business. If a firm's earning is less than this level of profit in the long run, it is not covering all of its costs and will eventually go out of business. Therefore, a firm will shut down if its earning is less than normal profit, as it cannot sustain its operations in the long run.