If the business can't cover variable costs, it should think about closing down soon. Thus, $25 is the price at which the company would consider ceasing operations.
A variable cost is a type of business expense that varies depending on how much a company makes or sells. Depending on a company's variable costs production, variable costs rise or fall. They rise when production rises and fall when production declines.
Examples of variable costs include raw material and packaging costs for manufacturing businesses, as well as credit card processing fees and company shipping costs for retail businesses, which fluctuate with sales. You can compare a variable cost to a fixed cost.
Variable and fixed costs make up the majority of any business's overall variable costs expenses. The production output or sales determine variable costs. The production's variable cost is a fixed sum for each unit company made.
Learn more about variable costs here
https://brainly.com/question/27853679
#SPJ4
