Should a firm shut down if its weekly revenue is $1,000, its variable cost is $900, and its fixed cost is $600, of which $450 is avoidable if it shuts down? Why?The firm shouldA. shut down because revenue of $1,000 is less than avoidable costs.B. produce because because variable costs are greater than fixed costs.OC. produce because revenue of $1,000 is greater than fixed costs.D. produce because revenue is positive.O E. produce because revenue of $1,000 is greater than variable costs.

A shutdown point is a point where the marginal revenue of the firm becomes equal to the variable…

Answered: Should a firm shut down if its weekly…

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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