Multiple Choice
A firm sets its price at $10.00 per unit.It has an average variable cost of $8.00 and an average fixed cost of $4.00 per unit.In the short run,this firm is
A) incurring a loss of $2.00 per unit and should shut down.
B) unable to cover all of its fixed cost and hence should shut down.
C) incurring a profit.
D) incurring a loss per unit of $2.00,but since it can still cover its variable costs,should continue to operate
Correct Answer:
Verified
Correct Answer:
Verified
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