Asked by
Arianna Romano
on Dec 11, 2024Verified
If an amusement park that is highly profitable during the summer months is unable to cover its variable costs during the winter months, it should
A) raise its prices during the winter months.
B) lower its prices during the summer months.
C) operate during the summer but shut down during the winter months.
D) operate during all months of the year as long as its profits during the summer exceed its losses during the winter.
Variable Costs
Expenses that vary directly with the level of production or sales volume, such as materials and labor.
Profitable
Generating revenue that exceeds the expenses, costs, and taxes needed to sustain the activity.
- Determine the instances when a firm is advised to go on, lower, or stop its production in the short-term timeframe.
- Distinguish between short-run and long-run decision-making for firms in competitive markets.
Verified Answer
EB
Learning Objectives
- Determine the instances when a firm is advised to go on, lower, or stop its production in the short-term timeframe.
- Distinguish between short-run and long-run decision-making for firms in competitive markets.
Related questions
If a Profit-Maximizing Firm Shuts Down in the Short Run ...
The Price-Taker Firm Should Discontinue Production Immediately If ...
Suppose That Price Is Below the Minimum Average Total Cost ...
Suppose the Minimum Average Total Cost (ATC) of a Firm ...
If Price Is Above Average Variable Cost and Below Average ...