Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25.
If the price of the product drops to $6 each,should this firm continue operation during the short run?
A) No,because Price is less than Average Total Cost.
B) Yes,because Price is greater than Average Variable Cost.
C) No,because Price is less than Average Variable Cost.
D) No,because Price is not greater than Average Total Cost.
Correct Answer:
Verified
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Q65: Acme Dynamite has $2000 of variable costs
Q67: The shutdown condition applies
A)in the long run
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