A firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then average:
A. Fixed cost will increase
B. Total cost will decrease
C. Fixed cost will necessarily be below average variable cost
D. Total cost will be less than average variable cost
B. Total cost will decrease
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According to economists
A) market capitalism is the best system available and some government intervention and regulation can either help or harm the social interest. B) market capitalism is the best system available and any government intervention and regulation will inevitably harm the social interest. C) centrally planned socialism is the best system available since governments generally make decisions that are in social interest. D) centrally planned socialism and pure market capitalism are equally capable of promoting social interest, but a mixed economy is an undesirable compromise between the two that will harm social interest.
A firm that maximizes profits also
A) is inefficient. B) cuts corners in production processes so that its products are made too cheaply. C) uses the least-cost combination of resources. D) pays input prices lower than other firms do.
The money supply is 4,000 . nominal GDP is 8,000 . and real GDP is 2,000 . Which of the following is 2?
a. the price level and velocity. b. the price level but not velocity. c. velocity but not the price level. d. neither the price level nor velocity.
The aggregate demand and aggregate supply graph has
a. quantity of output on the horizontal axis. Output can be measured by the GDP deflator. b. quantity of output on the horizontal axis. Output can be measured by real GDP. c. quantity of output on the vertical axis. Output can be measured by the GDP deflator. d. quantity of output on the vertical axis. Output can be measured by real GDP.