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In: Economics

Chuck Diesel Burger is a food truck in Houston, Texas

Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger’s minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50. Assume there are no barriers to enter into or exit from the food-truck market. Chuck Diesel Burger will suffer a loss but still produce if the price is equal to

Solutions

Expert Solution

=> ANSWER :: PRICE = $ 3

=> Explanation ::

To Make Profit Chuck Diesel Burger Have To Provide Its Burger At The Price Of $3 Its Is Because chuck diesel Burger Average Minimum Cost Is $3.75 so They Have to Provide The Prive Below The $3.75 To Earn Profit as Here Chuck Diesel Burger Price is Less Than The ATC So It Suffer From Loss In That Situation. If Firm Did Not Want to Shut Down They Have To Determine Price Which Is Between $2.50 To $ 3.75 So They Earn Profit On That So That Price Is $3 If Firm sell Its Product On That Price They Earn Profit.

Rahul Sunny answered 1 year ago
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