An insurance agent rents a building and has a three-year lease. An increase in the rent for the building increases the agent's
A) total cost and average variable cost.
B) total variable cost and average variable cost.
C) total fixed cost and total variable cost.
D) total fixed cost and average fixed cost.
E) total variable cost and total cost.
D
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A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 200 units is $4. The minimum possible average variable cost is $3.50. The market price of the product is $3. To maximize profits or minimize losses, the firm should
A. shut down. B. continue producing 200 units. C. increase production to more than 200 units. D. decrease production to less than 200 units.
In a market system, ________ provide signals about whether resources are relatively scarce or abundant
A) prices B) economists C) government officials D) scientists and engineers
Most savers:
A. lend their money directly. B. do not use proxies to decide who to lend their money to. C. deposit their savings into banks, retirement accounts, and life insurance companies. D. All of these are true.
The monopoly producer
A. sets MU equal to P. B. sets MR = MC. C. has MC > MU. D. sets MR = P.