YesDonuts, a perfectly competitive firm, has determined that its profit-maximizing quantity is 10,000 donuts per year. If YesDonuts' total revenue is $12,000 a year. and its costs per year are $16,000 rent on its store and $5,000 for ingredients, will YesDonuts exit the market in the long run?

Question

Accepted Answer

Yes, because it is incurring an economic loss.

Answer

No, because it is covering its fixed costs.

Answer

No, because all costs are variable in the long run.

Answer

No, because it is covering its variable costs.

Answer

Yes, because all costs are fixed in the long run.

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YesDonuts, a perfectly competitive firm, has determined that its profit-maximizi...

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