Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q For both firms, average total cost:
A. declines as quantity increases.
B. declines as quantity increases for Mega Corp and increases as quantity increases for Big Inc.
C. increases as quantity increases.
D. is constant for all quantities.
Answer: A
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