A company over utilising its resources is incurring losses as it is producing on rising part of average cost curve. The company needs suggestion as to how can it reduce lossess? Use diagram.

A company over utilising its resources is incurring losses as it is pr

1.	A company over utilising its resources is incurring losses as it is producing on rising part of average cost curve. The company needs suggestion as to how can it reduce lossess? Use diagram.
Answer» SOLUTION : The compoany is producing along rising average cost CURVE at `OQ_(1)`. Company is incurring losses as both marginal cost and average cost are rising. To reduce losses ot should cut down on costs by REDUCING production till OQ. The company should ENSURE optium utilisation of scare resources at E where MC cuts AC at its minimum.