The Short-Run Average Total Cost (ATC) Curve of a Firm

question 212

Multiple Choice

The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because

• A) larger firms always have lower per-unit costs than smaller firms.
• B) at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns.
• C) diminishing returns will be present when output is small, and high AFC will push per-unit cost to high levels when output is large.
• D) diseconomies of scale will be present at both small and large output rates.

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Definitions:

Receivables Methods

Methods used by businesses to manage and account for money owed to them by customers for goods or services delivered on credit.

Due Date

The specified date by which a task, assignment, payment, or project is expected or required to be completed or submitted.

Interest Due

The amount of interest payment that is owed but has not yet been paid at a particular date.

Maturity

This term refers to the date on which a financial obligation (such as a bond or loan) must be repaid in full.