All of the following statements about variable costs are true except
A. they are equal to total costs in the long run.
B. they are constant as output increases.
C. they are zero if output is zero.
D. they are equal to the product of average variable cost and the output level.
Answer: B
You might also like to view...
If Jessie studies economics for two hours instead of going to the movies with her friends, then
A) the benefit of studying is the missed movie. B) the opportunity cost of studying is the missed movie. C) Jesse definitely is making a rational choice. D) Jessie is ignoring a sunk cost. E) Jessie is not responding to any incentives.
If the absolute value of the price elasticity of demand for gasoline is 0.5, then a 10 percent increase in the price of gasoline leads to a 0.5 percent decrease in the quantity demanded
Indicate whether the statement is true or false
Pretty Polly produces dresses for little girls. At its current advertising level, Pretty Polly's marginal cost of advertising is $500,000 and their marginal benefit is $500,000. Which of the following is true?
A) The firm should increase the amount of advertising to increase its net profit. B) The firm is currently maximizing its net profit. C) The firm should reduce the amount of advertising to increase its net profit. D) The firm should double the amount of advertising.
Competition as a dynamic process implies that individual firms in a market
a. seek to utilize a variety of techniques, such as product, style, and convenience of location, to win the dollar vote of consumers, but they never use price to compete. b. use price competition as well as other forms of competition to gain the dollar votes of consumers. c. produce a homogeneous product. d. cooperate, attempting to establish a price and output structure so each firm can survive and continue to serve the consumer.