A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are
Question:
A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65.
a. What should the firm do in the short run? Why?
b. What should the firm do in the long run? Why?
c. At what price would the firm consider shutting down in the short run?
d. At what price would the firm consider shutting down in the long run?
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a The firm should continue to operate as the 70 price is greater than the 25 average var...View the full answer
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Related Book For
Managerial Economics
ISBN: 9781337106665
5th Edition
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward
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