A Firm Produces 400 Units of Output at a Total

question 248

Multiple Choice

A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000,

• A)average fixed cost is 50 cents.
• B)average variable cost is $2.
• C)average total cost is $2.50.
• D)average total cost is 50 cents.

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Definitions:

Dominant Strategy

In game theory, a strategy that is best for a player in a game regardless of the strategies chosen by the other players.

Game Trees

A graphical representation used to depict the outcomes of a game or decision-making process, showing different choices and their possible outcomes.

Sequential Games

are strategic interactions where the players make decisions one after another, with later players having knowledge of the earlier actions.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of other players, resulting in a situation where no player has an incentive to deviate from their chosen strategy.