Question

A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. At what price would the firm consider shutting down in the long run?

Answer 1

Answer:

price $65

Explanation:

given data

total output = 1,000 units  per week

Average Price = $70 per unit

Average Variable Cost = $25

Average Cost = $65

solution

we have given average cost is $65

so here firm consider for shutting down in long run  price is here $65

because when the firm price go below to $65

then the firm simply exit here  industry

so answer is  price = $65