Suppose You Find That the Price of Your Product Is

question 43

Multiple Choice

Suppose you find that the price of your product is less than minimum AVC. You should

• A)minimize your losses by producing where P = MC.
• B)maximize your profits by producing where P = MC.
• C)close down because, by producing, your losses will exceed your total fixed costs.
• D)close down because total revenue exceeds total variable cost.

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Definitions:

Output Terminal

The point in an electrical device or circuit where output is taken out or transferred to another circuit or component.

Emitter

A device or component that releases or sends out something such as energy, signals, or substances.

Amplification Capacity

The ability of an electronic system to increase the power, voltage, or current of a signal.

Transistor

An electronic component that boosts or changes electronic signals and electric power.