Question

Select all the items that describe the role of a producer.

1. You want to charge a price that does not cover fixed costs.
2. You want to charge a price that covers variable costs.
3. You want to charge a price that earns profits.
4. You want to have a large market share.

Answer 1

2. You want to charge a price that covers variable costs.

3. You want to charge a price that earns profits.

4. You want to have a large market share.

Step-by-step explanation:

Producers would like to charge a price that will enable them to cover their variable costs. A price lower than their variable costs will bring losses and a shutdown.

They would also like to charge a price that brings profits to them and their shareholders and this is the aim of doing business.

Producers would also like a large market share as this would mean more profit because more people would be buying their goods and services.