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 entry into or exit from the food-truck market. chuck diesel burger will suffer a loss but still produce if the price is equal to:
$4.00.$3.75.$3.00.$2.50.$2.00.

The answer is: $3.00

Explanation:

In order for Chuck Diesel Burger to make a profit it must sell its product at ˃$3.75.

If it sells its product at $3.75 it will break even (costs = revenue).

If its price is <3.75 but ˃$2.50 it will lose money but still produce, since its revenue is ˃ than its variable cost.

Any price ≤$2.50 would make it impossible for Chuck Diesel Burger to continue production since its revenue is < variable production costs.

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