The Dong-Rae Car Wash is operating its business near Pusan National University. The price per wash is
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Question:
The Dong-Rae Car Wash is operating its business near Pusan National University. The price per wash is $3. All fixed costs are sunk (A sunk cost is a cost that has already been spent and cannot be recovered.). The total number of cars washed is 800 per week. Its total variable cost and total costs are $1,600 and $3,600 respectively. Does the firm exit the car wash market? What if its total variable cost is $2,500?
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