Firm A and firm B both have total revenues of $250,000 and total costs of $350,000. Firm A has total fixed costs of $80,000 and firm B has total fixed costs of $50,000. a. Should firm A produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not? b. Should firm B produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not?
Firm A and firm B both have total revenues of $250,000 and total costs of $350,000. Firm A has total fixed costs of $80,000 and firm B has total fixed costs of $50,000. a. Should firm A produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not? b. Should firm B produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Firm A and firm B both have total revenues of $250,000 and total costs of $350,000. Firm A has total fixed costs of $80,000 and firm B has total fixed costs of $50,000.
a. Should firm A produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not?
b. Should firm B produce at a loss for the remainder of this short run period or shut down right now? Explain why or why not?
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