"I'm Losing Money, but Since My Fixed Costs Are So

question 122

Multiple Choice

"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, what can we conclude about this decision?

• A) It may be incorrect since a firm should shut down whenever price falls below average total cost in the short run.
• B) It may be incorrect because a firm experiencing economic losses should never continue to operate.
• C) It may be correct if the firm is covering all of its variable costs and expects the price of its product to rise in the near future.
• D) It may be correct if price is less than average variable cost.

---

Definitions:

Absenteeism

Refers to the consistent absence of an employee from their job without a valid reason, which can impact productivity and morale.

Team Viability

Refers to a team’s capacity for sustained success and maintaining effective performance over time.

Member Satisfaction

The degree to which the expectations and needs of a member of a group or organization are fulfilled.

Synergy

The interaction or cooperation among two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.