As output increases, average total cost always falls because average fixed cost declines.
Answer the following statement true (T) or false (F)
False
Although average fixed cost declines as output rises, average variable cost increases with output after some point, and this increase eventually causes average total cost to increase.
You might also like to view...
The American Recovery and Reinvestment Act of 2009 was introduced in the hope of:
A. reducing government spending. B. achieving a balanced budget. C. providing healthcare to the uninsured. D. shortening the Great Recession.
If a perfectly competitive firm manufacturing chairs produces 100 more chairs, what happens to the market price of a chair?
What will be an ideal response?
Critics of unconventional monetary policies argue that such operations take the Fed beyond its proper powers, may politicize it, and can unleash future inflation.
Answer the following statement true (T) or false (F)
This graph shows three different budget constraints: A, B, and C.
If Doug is on budget constraint C in the graph shown, what would cause it to shift to budget constraint B?
A. Doug's grocery store raises the price of milk by 10 percent. B. Doug loses his job. C. Doug finds soda at a warehouse outlet for a lower price. D. Doug's grocery store has lowered all prices by 33 percent.