A firm is producing 100 racing bicycles at a total cost of $84,000. The firm's fixed cost is $24,000. What is the average variable cost?
a. $840
b. $640
c. $600
d. $240
Ans: c. $600
You might also like to view...
With state and multistate lotteries, winners are typically given the choice between a lump sum payment today or a 20 year series of annuities. How should a winner decide which is better?
What will be an ideal response?
The revealed preference approach refers to:
A. asking consumer to reveal their preferences using survey methods. B. estimating demand curves by using data on individual consumers. C. a statistical method used to estimate demand curves. D. a method of gathering information about consumer's preferences by observing their actual choices.
This graph shows the cost and revenue curves faced by a monopoly. 
According to the graph, if the perfectly competitive outcome and monopoly outcome are compared, we can see that the:
A. monopoly creates deadweight loss. B. monopolist would charge P3 and the perfectly competitive firm would charge P1. C. perfectly competitive firm would lose money in this industry. D. perfectly competitive firm would produce Q1 units.
What is the output effect?
What will be an ideal response?