If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35, what is the firm's average fixed cost at that level of output?
A) $65
B) $50
C) $15
D) It is impossible to determine without additional information.
Answer: C
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The railroad companies of Pacific Union and Central Pacific were both built with massive government subsidies often on a per-mile basic in the late 19th century, which created railroad monopolies. Both failed soon after completion of their lines
The Great Northern railroad took much longer to build since it was completed without government subsidies. It turned out to be much more successful than either Pacific Union or Central Pacific. What could account for this apparent disparity?
Albro Martin (1971) argues that the Interstate Commerce Commission (1887–1995) was
(a) never a case of "capture." (b) "captured" by the railroads themselves. (c) "captured" by the customers of the railroads. (d) too ineffective to warrant "capture" by anyone.
There are several reasons why demand curves may become more elastic. Among them are
a. the market becomes more monopolistic and cross elasticities approach zero b. the goods become less differentiated and more firms enter the industry c. consumers have fewer substitutes and firms drop out of the industry d. industry demand increases and consumers increase spending e. the existence of a natural monopoly and an increase in fixed costs
An underlying assumption of economic analysis is that people engage in rational decision making and ______.
a. self-promotion b. bargain hunting c. marginal thinking d. economic growth