Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, marginal cost must be:
a. greater than the average variable cost.
b. equal to the average variable cost.
c. less than the average variable cost.
d. at its minimum.
b
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Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. What is the opportunity cost to Dan of making a sandwich?
A. 15 smoothies B. 5 smoothies C. 3 smoothies D. 1/3 of a smoothie
Which of the following does free trade encourage?
A) higher rates of economic growth B) more rapid spread of technology C) domestic industries' access to larger markets D) all of the above
Which of the following statements regarding a marginal-cost pricing rule for a natural monopoly is WRONG?
A) It maximizes total surplus in a regulated industry. B) The firm produces the efficient quantity. C) The firm's price equals its marginal cost. D) The firm makes an economic profit.
The real exchange rate is
A) the price of one currency in terms of another. B) the price of domestic goods relative to foreign goods. C) the quantity of gold that can be purchased by one unit of currency. D) the difference in interest rates between two countries.