If marginal cost equals average variable cost, average variable cost will
A. decrease.
B. increase.
C. be maximized.
D. be minimized.
Answer: D
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Along an IS curve as income levels __________, saving is smaller, so the interest rate must be __________ to reduce the level of investment so it will be equal to saving
A) increase; higher B) increase; lower C) decrease; higher D) decrease; lower
John is willing to sell his car for $3,000 . If the market price of the car is $5,000 . the producer surplus that John will receive is _____
a. $2,000 b. $3,000 c. $5,000 d. $8,000
Suppose that the price elasticity of supply of cheese is 0.80. If the price of cheese rises by 20%, the quantity supplied will increase by 16%.
Answer the following statement true (T) or false (F)
At the equilibrium level of real gross domestic product (GDP), unplanned inventory adjustment equals _____
a. planned investment b. saving c. zero d. actual investment e. consumption