The firm should shut down if the market price is:___________.
1 answer:
Answer: D. less than $4.50.
Explanation:
In the short run, a business should shutdown if the market price is below the Average Variable costs as because at this point, only losses are being made if the company stays in action.
If price is below the variable cost, it is best to shutdown so that the company can stop incurring the variable costs and incur the fixed cost alone. The lowest Average Variable cost is $4.50 for this good and so if the price falls below $4.50, the should shutdown.
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Answer:
(a)70 years
(b)23.33 years
(c)8.75 years
Explanation:
According to the Rule of 70, for a given interest rate x, funds double in years.
(a)For a savings account earning 1% interest per year,
The number of years it will take the fund to double= =70 years
(b)For a U.S. Treasury bond mutual fund earning 3% interest per year.
The number of years it will take the fund to double= =23.33 years
(c)For a stock market mutual fund earning 8% interest per year.
The number of years it will take the fund to double= =8.75 years