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 low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns.
c. diminishing returns will be present when output is small, and high AFC will push per-unit cost to high levels when output is large.
d. diseconomies of scale will be present at both small and large output rates.
B
You might also like to view...
In the table above, what inflation rate belongs in space C?
A) 17.0 percent B) 6.8 percent C) 8.3 percent D) -4.0 percent
If nominal GDP is $954 billion and velocity is 9, then the money supply: a. is $106 billion
b. is $122 billion. c. is $98 billion. d. is greater than $8 trillion.
Attaining higher and higher levels of air cleanliness causes
A) additional costs to rise to increasingly high levels.
B) larger and larger increases in per capita incomes.
C) additional costs to fall to lower and lower levels.
D) larger and larger marginal benefits to society.
A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should:
A. raise its price and cut output. B. leave price unchanged and cut output. C. cut its price and raise its output. D. leave price unchanged and raise output.