Acme Dynamite Has $2000 of Variable Costs and $500 of Fixed

question 37

Multiple Choice

Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25.
If the price of the product drops to $6 each,should this firm continue operation during the short run?

• A)No,because Price is less than Average Total Cost.
• B)Yes,because Price is greater than Average Variable Cost.
• C)No,because Price is less than Average Variable Cost.
• D)No,because Price is not greater than Average Total Cost.

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Definitions:

Logistic Regression

A statistical method for predicting binary outcomes by modeling the probability of a variable based on its logarithm.

Logistic Regression Model

A statistical method used for analyzing a dataset in which there are one or more independent variables that determine an outcome. The outcome is measured with a dichotomous variable (where there are only two possible outcomes).

Indicator Variable

A variable, usually binary, used to represent the presence or absence of a categorical effect in regression models.

Groceries

Consumer goods, especially food and household items, sold by a grocer.