A Firm's Average Variable Cost Is $60, Its Total Fixed

question 205

Multiple Choice

A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. Its average total cost is

• A) less than $58.
• B) between $58 and $62.
• C) between $62 and $64.
• D) more than $64.

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Definitions:

Stock Market

A public market for buying, selling, and trading stocks (shares) of publicly-held companies.

Alpha

A measure of the excess return of an investment relative to the return of a benchmark index.

Actual Return

The real gain or loss experienced on an investment, typically expressed as a percentage of the investment's initial cost.

Portfolio Beta

This measures the sensitivity of a portfolio's returns to changes in the market's returns, indicating the portfolio's overall exposure to market risk.