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In Response to Decreasing Profitability of Egyptian Apparel Producers in the Last

Question 10

Multiple Choice

In response to decreasing profitability of Egyptian apparel producers in the last 2 years due to economic conditions, businessman Alaa Arafa said to producers "The ball has to keep rolling even at a loss of profitability. Lose money but do not lose the market share," It is clear that Arafa was advising others to keep producing and not shut down to maintain their market share. In which of these cases should a producer ignore Arafa's advice and shut down?


A) If the average total cost equals the market price.
B) If the average variable cost is higher than the market price.
C) If the average total cost is higher than the market price, but, the average variable cost is less than the market price.
D) None of the above.

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