When the Price Faced by a Competitive Firm Was $5

question 157

Multiple Choice

When the price faced by a competitive firm was $5, the firm produced nothing in the short run. However, when the price rose to $10, the firm produced 100 tons of output. From this we can infer that:

• A) the firm's marginal cost curve must be flat.
• B) the firm's marginal costs of production never fall below $5.
• C) the firm's average cost of production was less than $10.
• D) the firm's total cost of producing 100 tons is less than $1000.
• E) the minimum value of the firm's average variable cost lies between $5 and $10.

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