Consider the Following Total Cost Schedule for a Perfectly Competitive

question 107

Multiple Choice

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
TABLE 9-3
-Refer to Table 9-3.If this firm were producing at an output level of 30 units,the AFC would be ________ and the AVC would be ________.

• A)$5; $6
• B)$6; $5
• C)$0.17; $0.20
• D)$0.20; $0.17
• E)$0.10; $0.30

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Definitions:

Expected Return

The mean value of the probability distribution of possible returns from an investment or portfolio.

Expected Return-Beta Relationship

A concept in finance that describes the relationship between the risk of an investment and its expected return, based on the beta coefficient.

APT

The Arbitrage Pricing Theory, a model that determines the required return on an asset by considering various macroeconomic factors.

CAPM

The Capital Asset Pricing Model, a financial theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.