A company produces two products. FC = Total Fixed costs = $580VC1= variable costs from product 1 = $920VC2= variable costs from product 2 = $805TR1= revenue from product 1 = $900TR2= revenues from product 2 = $900In the short run, what should the firm do?a.Produce product 1 but not 2b.Produce neitherc.Produce bothd.Produce product 2 but not 1

Total fixed cost is independent of output produced whereas variable cost varies with the level of production.

Answered: A company produces two products. FC =…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A company produces two products. FC = Total Fixed costs = $580
VC₁= variable costs from product 1 = $920
VC₂= variable costs from product 2 = $805
TR₁= revenue from product 1 = $900
TR₂= revenues from product 2 = $900
In the short run, what should the firm do?

a.Produce product 1 but not 2

b.Produce neither

c.Produce both

d.Produce product 2 but not 1

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