Question: 3 a firm sells 300000 units per week it charges...
3. A firm sells 300,000 units per week. It charges $45 per unit, the average variable costs are $40, and the average total costs are $55.
a.The company’s lease (fixed cost) expires in six months and they need to decide whether to renew. Should they? Explain why or why not..
b. At what price would the firm consider shutting-down before the lease expires?