Asked by
Micaela Beatriz
on Dec 08, 2024
Verified
A firm stands to lose by operating instead of shutting down if ________ does not sufficiently cover ________.
A) price; average variable cost
B) price; average fixed cost
C) total revenue; total costs
D) operating profit; economic profit
Average Variable Cost
The total variable costs of production divided by the quantity of output produced, representing the cost per unit of output.
Total Revenue
The complete sum of funds a company acquires from selling goods or offering services over a specified time period.
Operating Profit
The profit earned from a firm's core business operations, excluding deductions of interest and taxes.
- Assess the role of fixed and variable costs in determining the production strategies of a business.
- Evaluate the importance of cost curves in production decisions and considerations for ceasing operations.
Verified Answer
BV
Learning Objectives
- Assess the role of fixed and variable costs in determining the production strategies of a business.
- Evaluate the importance of cost curves in production decisions and considerations for ceasing operations.