Multiple Choice
A firm sells 1000 units per week.It charges $15 per unit,the average variable costs are $10,and the average costs are $25.In the short run,the firm should
A) Shut-down as the firm is making a loss of $10,000 per week
B) Shut-down as price is lower than average cost
C) Continue operating as the firm is covering all the variable costs and some of the fixed costs
D) Shut-down because it is cost effective to pay off the remaining fixed costs
Correct Answer:
Verified
Correct Answer:
Verified
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