​A Firm Sells 1000 Units Per Week

question 82

Multiple Choice

​A firm sells 1000 units per week.It charges $70 per unit,the average variable costs are $25,and the average costs are $65.In the short run,the firm should

• A)​Shut-down as the firm is making a loss of $15,000 per week
• B)Shut-down as price is lower than average cost
• C)Continue operating as the firm is covering all the variable costs and some of the fixed costs
• D)​Shut-down because it is cost effective to pay off the remaining fixed costs

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Definitions:

Commerce Clause

A provision in the U.S. Constitution (Article I, Section 8, Clause 3) granting Congress the power to regulate trade between states, with foreign nations, and among Indian tribes.

Congress

A bicameral body of government in the United States tasked with making laws, comprised of two houses: the Senate and the House of Representatives.

Trade Among States

The exchange of goods, services, or both between states within a country, subject to regulations and restrictions by the government.

Commerce Clause

A provision in the United States Constitution that grants Congress the power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.