If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals
a. that if the market price exceeds average cost, profits will be positive.
b. that if the market price is below average cost, then profits will be negative.
c. total revenues are the quantity produced multiplied by the price.
d. whether the firm is earning profit if fixed costs are left out of the calculation.

Peppy knows a lot about marketing, but not much about the legal or financial aspects of starting a new business. he wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting peppy's pizzazzeria up and running. peppy should: trust his basic instincts and try to put it together without the advice of lawyers and accountants. delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year. immediately hire full-time lawyers and accountants for his staff. consult with a lawyer and accountant even though the budget is tight.