A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65.1. What should the firm do in the short run? Why?2. What should the firm do in the long run? Why?3. At what price would the firm consider shutting down in the short run?4. At what price would the firm consider shutting down in the long run?
A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65.1. What should the firm do in the short run? Why?2. What should the firm do in the long run? Why?3. At what price would the firm consider shutting down in the short run?4. At what price would the firm consider shutting down in the long run?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.7IP
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A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65.
1. What should the firm do in the short run? Why?
2. What should the firm do in the long run? Why?
3. At what price would the firm consider shutting down in the short run?
4. At what price would the firm consider shutting down in the long run?
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