A business has revenue of $2 million
Total costs of $2.5 million, which are:
Total fixed cost of $1 million
Total variable cost of $1.5 million.
The net loss on the firm’s income statement is reported as $500,000 (ignoring tax implications).
What decision should the firm make regarding operations over the short term?
In the short run, the firm is able to cover all of its total variable cost but only half of its $1 million in total fixed cost.
If the business ceases to operate, its loss is $1 million, the amount of total fixed cost, whereas the net loss by operating is minimized at $500,000.
A business has revenue of $2 million
Total costs of $2.5 million, which are:
Total fixed cost of $1 million
Total variable cost of $1.5 million.
The net loss on the firm’s income statement is reported as $500,000 (ignoring tax implications).
What decision should the firm make regarding operations over the short term?
A business has revenue of $2 million
Total costs of $2.5 million, which are:
Total fixed cost of $1 million
Total variable cost of $1.5 million.
The net loss on the firm’s income statement is reported as $500,000 (ignoring tax implications).
What decision should the firm make regarding operations over the short term?
In the short run, the firm is able to cover all of its total variable cost but only half of its $1 million in total fixed cost.
If the business ceases to operate, its loss is $1 million, the amount of total fixed cost, whereas the net loss by operating is minimized at $500,000.
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
|---|---|---|---|---|---|---|---|
| repetition number in this series | 0 | memorised on | scheduled repetition | ||||
| scheduled repetition interval | last repetition or drill |