A banker motivated by profit maximization may make decisions that destabilize the banking system

If average variable cost exceeds average fixed cost at a particular level of output: a. Profits must be positive

b. That fact is meaningless for deciding the quantity of output to produce. c. It is more likely that the output level is low relative to the designed capacity of the production facility than that the output level is low relative to the designed capacity of the production facility. d. Both b and c. are likely true.

The level of output at which marginal revenue equals zero is also the level of output at which a. total revenue is zero

b. profit is maximized. c. total revenue is maximized. d. total revenue is declining.