The phrase 'sometimes profit maximisation means loss minimisation' is most appropriate for a firm which is producing where: A) P = ATC B) P ATC C) P = AVC D) AVC

Question

The phrase 'sometimes profit maximisation means loss minimisation' is most appropriate for a firm which is producing where:
A) P = ATC
B) P > ATC
C) P = AVC
D) AVC < P < ATC

Quizplus · Accepted Answer

When a firm is producing where AVC < P < ATC, it is covering its variable costs and some of its fixed costs, minimizing losses compared to shutting down, which would result in a loss equal to total fixed costs.

The Phrase 'Sometimes Profit Maximisation Means Loss Minimisation' Is Most