A firm's monthly revenue is $20,000, its variable cost is $15,000, and its fixed cost $8,000, of which $2,000 is avoidable if it shuts down. The firm should Group of answer choices not shut down because its revenue is greater than its avoidable cost. shut down because its revenue is less than its avoidable cost. not shut down because its revenue is greater than its unavoidable cost. shut down because its revenue is less than its unavoidable cost.
A firm's monthly revenue is $20,000, its variable cost is $15,000, and its fixed cost $8,000, of which $2,000 is avoidable if it shuts down. The firm should Group of answer choices not shut down because its revenue is greater than its avoidable cost. shut down because its revenue is less than its avoidable cost. not shut down because its revenue is greater than its unavoidable cost. shut down because its revenue is less than its unavoidable cost.
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 5.6IP
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![A firm's monthly revenue is $20,000, its variable cost is $15,000, and its fixed cost $8,000, of which $2,000
is avoidable if it shuts down. The firm should Group of answer choices not shut down because its
revenue is greater than its avoidable cost. shut down because its revenue is less than its avoidable cost.
not shut down because its revenue is greater than its unavoidable cost. shut down because its revenue is
less than its unavoidable cost.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c108d2c-243b-4151-b5a2-cb146b020cc5%2F566ad7a7-935b-48bc-bc2d-1531ff55c72c%2Fyavlwi_processed.png&w=3840&q=75)
Transcribed Image Text:A firm's monthly revenue is $20,000, its variable cost is $15,000, and its fixed cost $8,000, of which $2,000
is avoidable if it shuts down. The firm should Group of answer choices not shut down because its
revenue is greater than its avoidable cost. shut down because its revenue is less than its avoidable cost.
not shut down because its revenue is greater than its unavoidable cost. shut down because its revenue is
less than its unavoidable cost.
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