Engineers for the Giffen Record Company Have Determined That a 35

question 284

Multiple Choice

Engineers for The Giffen Record Company have determined that a 35% increase in all compact disc inputs will cause a 45% increase in output. Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases.

• A) average costs to increase
• B) average costs to decrease
• C) average costs to remain constant
• D) marginal costs to increase

---

Definitions:

Franchising Revenue Model

Earning revenue by selling franchises of an existing business to allow another party to trade under the name of that business.

Existing Business

An enterprise that is currently operational and has gone past the startup phase, often with established customers, revenue streams, and market presence.

Trade

The exchange of goods or services between parties, which can be within or across borders.

Intermediation Revenue

Income generated by serving as an intermediary in transactions between two or more parties, such as brokerage fees or commissions.