Refer to the diagram. The vertical distance between ATC and AVC reflects:
A. the law of diminishing returns.
B. the average fixed cost at each level of output.
C. marginal cost at each level of output.
D. the presence of economies of scale.
B. the average fixed cost at each level of output.
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If the government adopts expansionary monetary policy during a recession, ________
A) tax rates increase B) government spending falls C) access to credit increases D) interest rates increase
Price ceilings generally do not lead to which of the following?
A. Persistent shortages B. A reduction in the quality of the good C. An increase in the number of units purchased D. The development of black markets
Predatory pricing:
A. is an aggressive business move to maintain market power. B. was used by DeBeers to maintain control over the diamond market. C. is when a firm intimidates others to maintain the high prices the largest firms set. D. All of these statements are true.
A federal program aimed at retraining the unemployed workers of the declining auto and steel industries is designed to reduce which type of unemployment?
a. seasonal b. cyclical c. structural d. frictional