Average Cost (AC) is defined as the sum of Average Fixed Cost (AFC) and Average Variable Cost
(AVC), and dumping is defined as selling a product at a price less than AC but more than AVC. A
company in India, suddenly, found that the demand for its product "ZOOM" has fallen to 60% of the
output produced in that financial year. As a result, the company must sell 40% of the produced
output in a foreign market. If it decides to "dump" 40% of its output in a neighbouring country (by
reducing the price by 20%), what would be the objective of its 'dumping strategy', among the
following? (The company has set a profit margin of 10% of AC while fixing the price of its product
for sale in India).
(a) To minimize losses, (b) to maximize profits, (c) to contribute to the recovery of fixed
costs, (d) to contribute to the recovery of variable costs
A research team is studying the effects of three different fertilizers (X, Y, and Z) on the
growth of a specific plant species. They have four experimental plots with different
fertilizer combinations:
Plot 1: Fertilizer X only
Plot 2: Fertilizer Y only
Plot 3: Fertilizer X and Fertilizer Z only
Plot 4: Fertilizer Y and Fertilizer Z only
After a period of observation, they note the following:
Plants in plots with Fertilizer X showed significantly increased height compared to a control group (no fertilizer).
Plants in plots with Fertilizer Y showed a slightly increased leaf area compared to the control group.
Plants in Plot 3 (X and Z) showed no significant difference in height compared to the control group.
Plants in Plot 4 (Y and Z) showed significantly increased height compared to the control group.
Based on these observations, which of the following conclusions is best supported?