Question

A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25. The firm should Group of answer choices

Answer 1

Given that,

Units sold per week = 1,000

Price per unit = $15

Average variable costs = $10

Average costs = $25

Here, the price per unit charge by the firm is greater than the average variable cost. So, this would suggest that the firm should continue operating in the long run as the firm able to cover all of its variable cost and some part of the fixed cost.