If Paper-Pulp Factories Generate Too Much Water Pollution with Their

question 104

Multiple Choice

If paper-pulp factories generate too much water pollution with their discharge, which kills local fish stocks then:

• A) the government will not be able to do anything to stop this
• B) the factories will be concerned about the loss of fish and reduce their pollution
• C) the government can treat the water for pollution and restock the river
• D) the government can use environmental regulations to reduce the

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Definitions:

Fixed Costs

Costs that do not change with the level of output produced by a firm, such as rent and salaries.

Variable Costs

Expenses that change in proportion to the production output or sales volume of a company.

AVC

Average Variable Cost, calculated by dividing the total variable costs by the quantity of output produced.

AFC

Average Fixed Costs, which represent the fixed costs per unit of output, calculated by dividing total fixed costs by the number of units produced.