Average variable costs
A) are parallel with average total costs
B) rise if marginal costs rise.
C) are not parallel with average total costs.
D) fall with increases in production.
C
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If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:
a. there are economies of scale. b. the firm is probably having significant management problems. c. the firm should try to produce less output. d. total fixed costs are constant along the LRAC curve.
According to U.S. antitrust enforcement guidelines, a merger is likely to be challenged if
A. the industry after the merger has an HHI above 1,800 and the HHI rises by more than 100. B. the industry after the merger has an HHI above 1,000 and the HHI rises by more than 10. C. the industry after the merger has an HHI above 1,800 and the HHI falls by more than 100. D. the HHI decreases after the merger.
If the marginal cost of production is $10, the elasticity of demand for group 1 is -1.5, the elasticity of demand for group 2 is -2.5, and the price paid by group 1 is $15, the price for group 2 is
A) $8.33. B) $27. C) $15. D) Impossible to tell.
Even when faced with a relatively powerful seller, some buyers can still exert bargaining power.
Answer the following statement true (T) or false (F)