The Key Assumption Required for Us to Use a Linear

question 163

Multiple Choice

The key assumption required for us to use a linear variable cost function of the form VC = bq is that:

• A) marginal cost must be constant and equal to b.
• B) marginal cost must be increasing at rate b.
• C) fixed costs must be zero.
• D) marginal cost is always greater than average variable cost.

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