The Frank Failing Company Has an Average Variable Cost of $8,average

question 17

Multiple Choice

The Frank Failing Company has an average variable cost of $8,average fixed cost of $16,marginal cost of $12,and elasticity of demand -3.Frank should:

• A) shut down.
• B) charge $8.
• C) charge $16.
• D) charge $18.
• E) charge $36.

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Definitions:

March

The third month of the year in the Gregorian calendar.

Standard Amount

A predetermined benchmark for expenses, revenues, or units produced, used for budgeting and measuring performance.

Actual Output

The quantity of finished goods or services produced by a company over a specific period.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor, based on the standard rate and actual hours worked.