Which of the following holds true?
A. There is no relationship between AP and AVC.
B. When MP is rising AVC is falling, and when MP is falling AVC is rising.
C. When AP is rising AVC is falling, and when AP is falling AVC is rising.
D. When AP is rising AVC is rising, and when AP is falling AVC is falling.
Answer: C
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A) always gives rise to a monopoly. B) may not provide a barrier to entry. C) allows the patent owner to capture all of the consumer surplus. D) increases total welfare.
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A. higher; potential B. lower; higher C. lower; potential D. higher; higher
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A) congressional laws. B) whether the firm hires engineers or not. C) natural laws. D) the firm's production function.
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