A shoe store sells 250 pairs of sneakers per month at a per-unit price of $115. This is the price and quantity at which profits are maximized. The owner needs to pay a monthly rent of $5,500 whether the store stays open or not, and the rental contract cannot be canceled in the near future. The total variable cost (TVC) of the shoe store is $25,000 per month. What should the owner of the store do in the short run? O Keep the store open even though negative profits are being made O Continue to produce even in the long run, as the store is making positive profits O Decrease the price and sell more shoes O Close the store O Sell fewer pairs of shoes

A shoe store sells 250 pairs of sneakers per month at a per-unit price of $115. This is the price and quantity at which profits are maximized. The owner needs to pay a monthly rent of $5,500 whether the store stays open or not, and the rental contract cannot be canceled in the near future. The total variable cost (TVC) of the shoe store is $25,000 per month. What should the owner of the store do in the short run? O Keep the store open even though negative profits are being made O Continue to produce even in the long run, as the store is making positive profits O Decrease the price and sell more shoes O Close the store O Sell fewer pairs of shoes

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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