Tom's Campgrounds is a firm conducting business in a competitive market. Tom realizes he is making a loss and is trying to decide whether to shut down or stay open. He should stay open:
A) regardless of the price being charged.
B) if the price being charged is less than his minimum average variable cost (AVC) .
C) if his revenues do not cover his variable costs.
D) if his revenues cover his variable costs.
E) as long as he is making revenue.
Correct Answer:
Verified
Q49: Jim and Lisa own a dog-grooming business
Q50: Chuck Diesel Burger is a food truck
Q52: Refer to the accompanying table. A
Q53: Refer to the accompanying table. A
Q56: Refer to the accompanying figure. A firm
Q58: Refer to the accompanying table. A
Q59: Firms will always suffer a loss only
Q80: When revenue is insufficient to cover cost,the
Q89: In the short run,a competitive firm may
Q97: Firms will be indifferent about shutting down
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents