Claude's Copper Clappers Sells Clappers for $65 Each in a Perfectly

question 51

Multiple Choice

Claude's Copper Clappers sells clappers for $65 each in a perfectly competitive market.At its present level of output,Claude's marginal cost is $65,average variable cost is $45,and average total cost is $67.To maximize his profit or minimize his loss,Claude should _____

• A)increase output.
• B)reduce output but not to zero.
• C)continue producing the present level of output.
• D)shut down.
• E)raise the price.

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Definitions:

Operating Lease

A lease agreement allowing the use of an asset but does not convey rights of ownership of the asset.

Relatively Short

The term "relatively short" refers to a period of time that is short in comparison to other relevant timeframes or expectations.

Technological Changes

The overall process of invention, innovation, and diffusion of technology or processes.

Direct Lease

A lease where the lessor purchases the asset and then leases it directly to the lessee, without using a lease intermediary.