Suppose You Are Deciding Whether or Not to Increase Production

question 96

Multiple Choice

Suppose you are deciding whether or not to increase production. You are making a loss with many competitors. If you produce one more unit your increase in cost will be $10, your average variable costs will increase to $9.50 and your average fixed costs will decrease. Finally, the price you are able to charge will be $9.75 You should

• A)Increase production by at least 1 unit.
• B)Increase production by exactly 1 unit.
• C)Leave production unchanged, profit is maximized where you are.
• D)Shut down

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Definitions:

Ethnic Group

A community or population made up of people who share a common cultural background or descent.

Superiority

The quality or state of being higher in rank, quality, or importance.

Parenting Style

The general approach and strategies adopted by parents in raising their children, including discipline methods and expressions of affection.

Permissive

Allowing or characterized by latitude of action or opinion; particularly in psychology, refers to a parenting or authoritative style that is lenient and flexible.