The Higher the Level of FC

question 11

Multiple Choice

The higher the level of FC:

• A)the lower the level of output which minimizes SMC.
• B)the lower the profit, ceteris paribus.
• C)the higher the level of output at which AFC reaches a minimum.
• D)the more likely a firm will substitute variables for fixed factors.

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Definitions:

Self-Interest

An individual’s actions and decisions motivated by personal gain or benefit.

Public Interest

Denotes the well-being of the general public and the consideration of what is beneficial for society as a whole.

Economic Profits

Profits exceeding the opportunity costs of all inputs, indicating a return beyond the norm expected in the market or industry.

Industry

A sector of the economy characterized by a specific type of activity or product, such as manufacturing, technology, or services.