Should a firm shut down if its weekly revenue is $ 1,000, its variable cost is $

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Should a firm shut down if its weekly revenue is $ 1,000, its variable cost is $ 500, and its fixed cost is $ 800, of which $ 600 is avoidable if it shuts down? Why? 2.5.

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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Question Posted: Nov 13, 2014 03:33 AM

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Should a firm shut down if its weekly revenue is $ 1,000, its variable cost is $

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Only 200 of the fixed cost is sunk The firm should shut down i...View the full answer

Managerial Economics and Strategy

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