My MINIMIZING LOSS Tonel - Suppose Mario has faced a very tough problem. He begins to incur losses in not the price. Suppose that the the operation of the bakery. He knows that he can control the production cost but at the price of bread dropped from P8/unit to P6/unit. What can Mario do to lessen the impact of incurring too much loss? Mario should still follow the MR = MC rule. At price equals P5/unit, Mario should produce at 700 units because this is where he can minimize his losses. He would incur a loss of (P5 - P5.876) x 700 =-P600. If Mario decides to produce more units, say, 900 units he would incur a greater loss of (P5 - P6.133) x 900 = -P1020. If he decide to produce less than 700 units say, 300 units he will loss (P5 - P9) x 300 = -P1,200. It is a good business sense for Mario to minimize his loss. That is, if he produces at to follow is MR = MC. 700 units. Mario discover that in maximizing profit and minimizing loss, the rule Another important rule for Mario is that if P = MR = MC AVC he should continue to operate his business. Suppose overtime work, increase and rush the order of raw materials to meet the increase the market price has gone down further to P3/unit. Since P