(Answered) Total fixed cost or sunk cost is independent of quantity

Management Studies

Total fixed cost or sunk cost is independent of quantity produced."Suppose a small firm has invested $10 million in total fixed cost and another $18 million in total variable cost. The firm has started marketing its new product at a price of $25.00 per unit; however, the average variable cost of the product is $30.00.

Should this firm shut down? Why or why not?

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Operation Management, Management Studies

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