The asnwer is B) not shut down because its revenue is greater than its unavoidable cost.
We know shutdown point of firm is the condition when firm cannot cover up its variable costs. Here revenue is higher than variable cost and hence firm should continue operations. The fixed cost for any firm is seen as a sunk cost and is hence not considered in deciding shutdown point of a firm,
Afirm's monthly revenue is $20,000, its variable cost is $15,000, and its fixed cost $8,000, of...
Afirm's monthly revenue is $15,000, its variable cost is $10,000, and its fixed cost $5,000, of which $2,000 is avoidable if it shuts down. The firm should shut down because its revenue is less than its avoidable cost. O not shut down because its revenue is greater than its avoidable cost. not shut down because its revenue is greater than its unavoidable cost. O shut down because its revenue is less than its unavoidable cost.
Should a firm shut down if its weekly revenue is ?$1,000 its variable cost is ?$600 and its fixed cost is ?$1,500 of which ?$250 is avoidable if it shuts? down? ? Why? The firm should A. produceproduce because revenue of ?$1,000 is greatergreater than avoidable costs. B. produceproduce because revenue of $1,000 is greatergreater than variable costs. C. shut downshut down because revenue of ?$1,000 is less than fixed costs. D.produce because revenue is positive. E.shut downshut down because...
For questions 4-6: A firm has weekly revenue of $1000. The firm's total cost is $1450 per week. The firm will shut down if weekly fixed (sunk) cost is The firm's variable cost is $900 and its fixed cost, which is all sunk, is $500. The firm will shut down. 2 The firm's variable cost is $500 and its fixed cost is $800. The firm shuts down if the percentage of fixed costs that is avoidable is greater than
A small firm has monthly revenue of $15,000, variable costs of $12,000, and fixed costs of $5,000. The firm's profit is and it shut down. O-$2,000; should O -$3,000; should O $2,000; should not O $3.000, should not
A small firm has monthly revenue of $20,000, variable costs of $21,000, and fixed costs of $2,000. The firm's profit is and it shut down. O -$1,000; should O-$3,000; should not O-$1,000; should not -$3,000; should
A firm has weekly revenue of $1000. a) The firm's total cost is $1450 per week. The firm will shut down if weekly fixed (sunk) cost is what? b) The firm's variable cost is $500 and its fixed cost is $800. The firm shuts down if the percentage of fixed costs that is avoidable is greater than 20%, 40%, 60%, or 80%?
Initially, the market price is p=20, and the competitive firm's average variable cost is 18, while its average cost is 21. Should it shut down? Why? This firm should O A. not shut down because average cost is greater than average variable cost. OB. shut down because average fixed cost is less than the market price. O C. not shut down because average variable cost is less than the market price. OD. not shut down because average fixed cost is...
A firm should shut down only if is less than O revenue; avoidable cost marginal revenue; marginal cost O revenue; zero O marginal revenue; unavoidable cost
For questions 4-6: A firm has weekly revenue of $1000. The firm's total cost is $1450 per week. The firm will shut down if weekly fixed (sunk) cost is 2 40 500 HD] 70 2 “ ។ ៩ ៥ ៩៥ ៩ ៩ ន ដ ន ម ១ The firm's variable cost is $900 and its fixed cost, which is all sunk, is $500. FTRUE The firm will shut down. ALSE 2 The firm's variable cost is $500 and its faed...
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....