Question

Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger’s minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50. Assume there are no barriers to entrer into or exit from the food-truck market.Chuck Diesel Burger will shut down if the price is equal to

a) $4.00.
b) $3.75.
c) $3.00.
d) $2.50.
e) $2.00.

Answer 1

E, $2.00

Step-by-step explanation:

If the price of burger goes below both the average total cost and average variable cost, then Chuck diesel Burger will run at a loss and eventually shut down operation.

since the aim of the businees is to make profit while attending to the needs o fits customers, the burger can be sold for the other prices in the options and the food truck business will remain and stay alive and operating well.

Cheers.