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Variable Costs

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A firm has total costs (TC) of $10,000 over the next three months (total for the 3 months - not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $5,000 in revenues (TR). So, considering only this information, should they stay in business for those three months, or should they close down right now? Provide the reasoning.

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Variable costs are explained.

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They should stay in business as long as variable costs are lower ...

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