Suppose You Find That the Price of Your Product Is

question 158

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:

Negative Reinforcement

Rewards desired behavior by taking away something aversive.

Variable-Ratio Reinforcement

Giving out a reward after a random number of behaviors.

Fixed-Interval Reinforcement

Giving out a reward after a certain amount of time has passed.

Variable-Interval Reinforcement

Giving out a reward after a random amount of time has passed.