Firm a and Firm B Both Have Total Revenues of $200,000

question 97

Multiple Choice

Firm A and firm B both have total revenues of $200,000 and total costs of $250,000; firm A has total fixed costs of $40,000,while firm B has total fixed costs of $70,000.Which of the following statements are true in the short run?

• A)Firm A should operate.
• B)Firm B should operate.
• C)Firm A should shut down.
• D)Firm B should shut down.
• E)both b and c

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Definitions:

Next of Kin

A person's closest living blood relative or relatives who may have legal duties or responsibilities for them in certain circumstances.

TILA (Truth in Lending Act)

A United States federal law designed to protect consumers in their dealings with lenders and creditors by requiring clear disclosure of key terms of the lending arrangement and all costs.

Promissory Note

A written, legally binding agreement in which one party promises to pay another a specified sum of money at a specified time.

Security Interest

A legal claim or right on collateral granted to a lender, ensuring the collection of a debt or obligation.