Average cost curves decline because
a. fixed cost is spread out over larger amounts of production.
b. it becomes cheaper to produce an infinite amount of goods.
c. additional units of production are inferior.
d. variable costs increase with each additional amount of production.
a
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Suppose a firm produces pollution when it generates electricity. The cost of the pollution is called the
A) marginal cost. B) marginal private cost. C) marginal external cost. D) marginal social cost.
Why would a profit maximizing monopolist in a contestable market set its price at a level below that which maximizes short run profits?
What will be an ideal response?
Economic activity moves from a period of recession to a ________ and then moves into a period of ________ until it reaches a ________.
A. trough; expansion; peak B. trough; recession; peak C. peak; expansion; trough D. peak; recession; trough
If a subsidy (going to producers) is created for a good, this would
A. move its supply curve to the right. B. cause a movement along the supply curve to a (lower price, lower quantity) point. C. cause a movement along the supply curve to a (higher price, higher quantity) point. D. move its supply curve to the left.