Question

Mars Inc. produces 100,000 boxes of Snickers bars which sell for $4 a box. If variable costs are $3 per box, and it has $150,000 fixed operating costs, in the short run, it should keep producing as total costs are being recovered. keep producing as variable costs are being met. shut down as fixed costs are not being covered. keep producing as profits are $50,000.

Answer 1

Answer:

keep producing as variable costs are being met.

Explanation:

A firm should shutdown in the short run if price is less than average variable cost. But since price is greater than the average variable cost, the firm should keep producing in the short run.

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