Why Would a Firm Decide to Produce a Positive Quantity

question 40

Multiple Choice

Why would a firm decide to produce a positive quantity of a output even though it makes negative profits by doing so?

• A) Because the price is high enough to cover the average fixed cost.
• B) Because the price is high enough to cover the average variable cost.
• C) Because the price is high enough to cover the average total cost.
• D) A firm would never produce when profit is negative.

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Definitions:

Urinalysis

A laboratory test that analyzes urine for a variety of disorders, such as infections, kidney disease, and diabetes.

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Chemical compounds that can be used as food preservatives or may form in the body from nitrates, with various health implications.

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A method used to prevent contamination of wounds and other susceptible sites by ensuring an environment that is free from all microorganisms.

Medical Asepsis

The practices used to reduce and prevent the spread of microorganisms and infection, such as handwashing and sanitization.