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NIMCET 2025 Paper

Section: Analytical Ability & Logical Reasoning

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Question : 85

Total: 120

Average Cost (AC) is defined as the sum of Average Fixed Cost (AFC) and Average Variable Cost (AVC), and dumping is defined as selling a product at a price less than AC but more than AVC.
A company in India suddenly found that the demand for its product "ZOOM" has fallen to 60\% of the output produced in that financial year. As a result, the company must sell 40% of the produced output in a foreign market. If it decides to "dump" the remaining 40% of its output in a neighbouring country (by reducing the price by 20% ), what would be the objective of its dumping strategy, among the following?
(The company has set a profit margin of 10% of AC while fixing the price of its product for sale in India.)
(a) To minimize losses
(b) To maximize profits
(c) To contribute to the recovery of fixed costs
(d) To contribute to the recovery of variable costs

(a) and (b)
(b) and (d)
(b) and (c)
(a) and (c)

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