WAEC Economics 2025 Objective — Question 25
Question 25 of 51 from the West African Examinations Council (WAEC) Economics 2025 Objective paper, with the correct answer and a full explanation.
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If a firm's minimum average variable cost exceeds its average revenue, the firm must
- A. employ more labour.
- B. increase its production capacity.
- C. shut down completely.Correct
- D. pay new allowances to its workers.
Explanation
If average revenue cannot even cover average variable cost, the firm should shut down immediately to avoid worsening losses.
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