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Suppose you find that the price of your product is less than minimum AVC. You should: minimize your losses by producing where P = MC. maximize your profits by producing where P = MC. close down because, by producing, your losses will exceed your total fixed costs. close down because total revenue exceeds total variable cost.

Sagot :

Answer: close down because, by producing, your losses will exceed your total fixed costs

Explanation:

When the price of a particular product is less than minimum AVC, the best thing to do in such scenario is close down because, because if one produces, the losses will be more than the total fixed costs for that product.

When such scenario happens, the company won't be able to cover its operational cost and therefore won't make profit but rather losses and therefore, the company should close down.

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