The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because
a. larger firms always have lower per-unit costs than smaller firms.
b. at small output rates, average fixed costs (AFC) will be high, while at large output rates, marginal cost (MC) will be high.
c. diminishing returns will be present when output is small, while high AFC will push average total cost to high levels when output is large.
d. diseconomies of scale will be present at both small and large output rates.
B
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What is marginal cost? Which curve is also referred to as the marginal cost curve?
What will be an ideal response?
Suppose that the production function for the economy is Y = AK1/4L3/4. Assume that real GDP is $8,000 billion, capital stock is $32,000 billion, and the labor supply is 120 million (or 0.120 billion) workers
Total factor productivity for this economy is A) 16.50 B) 1,016.52 C) 2,083.33 D) 2,933.65
The slope of the budget line in the graph shown:
A. represents the opportunity cost of the two goods relative to each other.
B. represents the relative marginal utilities from consuming the two goods.
C. measures the total utility the consumer gets from consuming the two goods.
D. is the consumer’s income level.
Most of Europe has relatively _______ inequality, and much of Latin America and southern Africa has relatively _________ inequality.
A. low; low B. high; high C. high; low D. low; high