Decision shut down firm by average variable cost of product, Microeconomics

+44 141 628 6080
[email protected]

Decision shut down firm by average variable cost of product

Suppose a small firm has invested $10 million in total fixed cost and another $18 million in total variable cost. The firm has started marketing its new product at a price of $25.00 per unit; however, the average variable cost of the product is $30.00.Should this firm shut down? Why or why not?

Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Decision shut down firm by average variable cost of product

Reference No:- TGS046786

Expected delivery within 24 Hours

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Microeconomics

Q : How many expected automobiles us automakers to sell

How many automobiles do you expect U.S. automakers to sell next year? (b) By how much should domestic auto-makers increase the price of automobiles if they wish to increase sales by 5 percent next year?

Q : Account of the cost of hedging

A gold producer entered into a December futures contracts on March 1 to hedge the sale of gold on November 1. It closed out its position on November 1. After taking account of the cost of hedging, what is the effective price received by the compan

Q : Fundamentals of straight-line method of depreciation

Stable uses the straight-line method of depreciation. What is the gain/loss on the sale of equipment that Stable will recognize if the equipment was sold for $230,000?

Q : Forward contract with a delivery price

The spot price of an investment asset that provides no income is $20 and the risk-free rate for all maturities (with continuous compounding) is 10%. What is the value to the nearest cent of a three-year forward contract with a delivery price of $3

Q : Decision shut down firm by average variable cost of product

The firm has started marketing its new product at a price of $25.00 per unit; however, the average variable cost of the product is $30.00. Should this firm shut down? Why or why not?

Q : Amount of checkable deposits after deposit expansion

What would be the maximum amount of checkable deposits after deposit expansion, and what would be the money multiplier? How would your answer in (a) change if the reserve requirement had been 9 percent.

Q : Accelerated depreciation in computing taxable income

Many companies use accelerated depreciation in computing taxable income because:

Q : Prepare the required note disclosure for the long-term debt

At December 31, 2012, Redmond Company has outstanding three long-term debt issues. The first is a $2,032,000 note payable which matures June 30, 2015.

Q : What is the total depreciation expense for the current year

Cardco Inc. has an annual accounting period which ends on December 31. During the current year a depreciable asset which cost $42,000 was purchased on September 2. The asset has a $4,000 estimated salvage value. The company uses straight-line depr

1926072

Questions
Asked

3,689

Active Tutors

1431013

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Decision shut down firm by average variable cost of product

Reference No:- TGS046786

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : How many expected automobiles us automakers to sell

Q : Account of the cost of hedging

Q : Fundamentals of straight-line method of depreciation

Q : Forward contract with a delivery price

Q : Decision shut down firm by average variable cost of product

Q : Amount of checkable deposits after deposit expansion

Q : Accelerated depreciation in computing taxable income

Q : Prepare the required note disclosure for the long-term debt

Q : What is the total depreciation expense for the current year

How ensure that the youth understand what study involves

Identify a specific theory of cognitive or moral development

Describe some of your personality traits

Problem concerning consensual sexual relationship

Provide reasons why working from a person centred

Is early food experiences can impact development

Examine historical literature to the most current period

Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Decision shut down firm by average variable cost of product

Reference No:- TGS046786

Recent Questions Asked Microeconomics

Q : How many expected automobiles us automakers to sell

Q : Account of the cost of hedging

Q : Fundamentals of straight-line method of depreciation

Q : Forward contract with a delivery price

Q : Decision shut down firm by average variable cost of product

Q : Amount of checkable deposits after deposit expansion

Q : Accelerated depreciation in computing taxable income

Q : Prepare the required note disclosure for the long-term debt

Q : What is the total depreciation expense for the current year

Asked Questions