When Acme Dynamite Produces 250 Units of Output, Its Variable

question 97

Multiple Choice

When Acme Dynamite produces 250 units of output, its variable cost is $2,000, and its fixed cost is $500. It sells each unit of output for $25. If the price of dynamite drops to $10, should Acme Dynamite continue to operate in the short run?

• A)No, because price is less than average total cost.
• B)Yes, because price is less than average variable cost.
• C)No, because price is not greater than average total cost.
• D)Yes, because price is greater than average variable cost.

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Definitions:

Net Investment Income

Income received from investment assets (like shares or bonds) minus fees, costs, and taxes associated with the investment.

Foreign Countries

Nations or territories outside one's own country, often referred to in the context of international trade, travel, or diplomatic relations.

U.S. Investments

Funds or resources allocated by individuals, corporations, or the government within the United States in hopes of generating positive returns or economic growth.

Importer

An individual or organization that buys goods from other countries for resale or use in the domestic market.