Constant Marginal Costs Occur When Production of Each Individual Unit

question 146

Multiple Choice

Constant marginal costs occur when production of each individual unit costs:

• A)less than the previous one.
• B)more than the previous one.
• C)the same as the previous one.
• D)more than the next one.

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Definitions:

Lerner Index

A measure of a firm's market power, calculated as the difference between price and marginal cost relative to price.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, perfect information, and no barriers to entry or exit.

Multiplant Firm

A company that operates in more than one location, often to take advantage of different regional resources or markets.

Marginal Costs

The cost associated with producing an additional unit of output in a production process.