A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. In the long run, the firm should a. Continue operating price is higher than average cost, its making a profit b. Shut down since price is greater than average cost c. Shut-down because it is cost effective to pay off the remaining fixed costs d. Continue operating as the firm is covering all the variable costs and some of the fixed costs

a. Continue operating price is higher than average cost, its making a profit

Explanation:

In the long run, a company should only continue to operate if its price per unit is greater than total costs per unit.

In this case, total costs per unit are $65, while the selling price per unit is $70.

Since $70 > $65, then the company should continue operating since it is making a profit.

The answer is a. Continue operating price is higher than average cost, its making a profit.

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough