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Statement b is correct. If AR is less than AVC, then each unit of output has a revenue below its variable cost. In turn, total revenue is less than total variable cost, so the firm's loss would equal the gap between its total revenue and its total variable cost plus its total fixed cost. If the firm instead shut down and produced nothing, it would have a zero total revenue, and it would buy no variable inputs and so have a zero total variable cost. So its loss would only equal its total fixed cost.
A manufacturing company is considering expanding its production capacity by acquiring new machinery. The company is exploring the option of leasing the ...
Which of the following will be the features of Zero Risk?
I. It does not have any uncert...
Which of the following instruments do not contain Zero Risk?
Compared to investing in a single security, diversification provides investors a way to:
What is the difference between a non-performing asset (NPA) and a stressed asset in India?
Which of the following is typically excluded from the calculation of the firm’s working capital needs when using the Operating Cycle method?
Under the proposed framework for adoption of an expected loss-based approach for provisioning by banks in India, which of the following is NOT a key req...
A setup in which group of individuals or entities decides to pool resources towards fulfilling a debt or financing a single borrower wherein the setup i...
Which of the following is not a major gold trading center?
Which of the following statements is/are true about the Bombay Stock Exchange (BSE)?
1)It is the oldest stock exchange in Asia.
2)It was e...