Average total cost is very high when a small amount of output is produced because
a. average variable cost is high.
b. average fixed cost is high.
c. marginal cost is high.
d. marginal product is high.
b
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
According to the excess capacity theorem, if every firm under monopolistic competition expanded its output,
a. cost per unit of output would rise. b. social benefits would increase. c. cost per unit of output would decrease. d. MC and AC would remain unchanged.
Are whales excludable? Are they rival in consumption? How do we classify whales in terms of the four types of goods?
Will a profit-maximizing monopolist who is not subject to government regulation produce a quantity where the MR < 0?
What will be an ideal response?