The Range of Output Over Which a Firm's Average Variable

question 258

Multiple Choice

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

• A) marginal cost is increasing.
• B) average fixed cost is decreasing.
• C) average product is increasing.
• D) average product is decreasing.

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Definitions:

Supply

The total amount of a certain good or service that is available for purchase at a particular price level and time.

Perfectly Inelastic

Refers to a market situation where the quantity demanded or supplied does not change regardless of the price level changes.

Perfectly Elastic

Describes a market situation where quantity demanded or supplied changes by an infinite amount in response to any change in prices.

Demand

The willingness and ability of consumers to purchase goods and services at various prices.