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29 March, 19:41

A firm's marginal cost has a minimum value of $50, its average variable cost has a minimum value of $80, and its average total cost has a minimum value of $90. Then the firm will shut down if the price of its product falls below

a. $90.

b. $80.

c. $50.

d. $40.

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Answers (1)
  1. 29 March, 20:36
    0
    correct option is b i. e $80

    Explanation:

    Given details

    marginal cost is $50

    average variable cost is $80

    average total cost is $90

    From the data given above we can conclude that firm will shut down if product price will fall below than $80

    shut conditioned occur when product price fall below than average variable cost.

    Therefore correct option is b i. e $80
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