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A firm hasaverage variable Costs of RO 60 per unit, average fixed costs of RO 40 per unit and can sell its output at KO 50ner unit. AFC + AVC = ATC 40 + 60 = (00 J TC = 0 = 25 AFCa. The firm should keep operating in the short run. The firm should shut down in the short run. c. The firm needs to increase output in the short run. The firm needs to keep operating in the long run, since average revenue is more than average fixed costs. MC %3D

A firm hasaverage variable Costs of RO 60 per unit, average fixed costs of RO 40 per unit and can sell its output at KO 50ner unit. AFC + AVC = ATC 40 + 60 = (00 J TC = 0 = 25 AFCa. The firm should keep operating in the short run. The firm should shut down in the short run. c. The firm needs to increase output in the short run. The firm needs to keep operating in the long run, since average revenue is more than average fixed costs. MC %3D

ENGR.ECONOMIC ANALYSIS
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 firm hasaverage variable Costs of RO 60 per unit, average fixed costs of RO 40 per unit and can sell its output at KO 50ner unit. AFC + AVC = ATC 40 + 60 = (00 J TC = 0 = 25 AFCa. The firm should keep operating in the short run. The firm should shut down in the short run. c. The firm needs to increase output in the short run. The firm needs to keep operating in the long run, since average revenue is more than average fixed costs. MC %3D
Transcribed Image Text:A firm hasaverage variable Costs of RO 60 per unit, average fixed costs of RO 40 per unit and can sell its output at KO 50ner unit. AFC + AVC = ATC 40 + 60 = (00 J TC = 0 = 25 AFCa. The firm should keep operating in the short run. The firm should shut down in the short run. c. The firm needs to increase output in the short run. The firm needs to keep operating in the long run, since average revenue is more than average fixed costs. MC %3D
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