Author Question: Suppose the estimated fixed cost of Christmas trees business is 7,000 and not sunk. The estimated ... (Read 55 times)

jlmhmf · **on:** Jul 1, 2018

Suppose the estimated fixed cost of Christmas trees business is 7,000 and not sunk. The estimated variable cost for each tree is 20.

According to the forecast, the market price for Christmas trees is 25 each and the owner could sell 1000 trees at most each year. In the long run, the owner A) should shut down.
B) should keep operating.
C) should sell less.
D) None of the above.

Question 2

Suppose the fixed cost of Christmas trees business is 7,000 and sunk. The variable cost for each tree is 20. According to the forecast, the market price for Christmas trees is 25 each and the owner could sell 1000 trees at most each year.

The owner A) should shut down the business.
B) should keep operating.
C) should sell less.
D) None of the above.