Figure 7-11 -Figure 7-11 Shows an Average Cost Curve with Points on with Points

question 124

Multiple Choice

Figure 7-11
-Figure 7-11 shows an average cost curve with points on it that correspond to three quantity levels.Which of the following statements must be wrong?

• A)The firm's technology may show increasing marginal returns as production increases from A to B.
• B)The firm may have positive fixed costs.
• C)As production expands from A to B to C, the firm may become increasingly difficult to manage efficiently.
• D)The firm's average fixed cost may rise as production increases from B to C.

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Definitions:

Typeset

The arrangement and composition of text in preparation for printing and publication.

Inverse Demand Function

A mathematical expression that describes the relationship between the price of a good and the quantity demanded, showing how price changes as a function of demand.

Unit Tax

A tax that is imposed on a per unit basis, meaning that a specific amount is taxed for each unit of a good or service sold.

Total Costs

The total of variable and fixed expenses a business faces during the manufacturing of products or delivery of services.