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problem about Variable costs

A firm has Total Costs (TC) of $10,000 over the next three months (TOTAL for the 3 months - not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $5,000 in revenues (TR). So, considering only this information, should they stay in business for those three months, or should they close down right now? Provide the reasoning.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M927218

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