Graph 13-6 This Graph Depicts Average Total Cost Functions

question 146

Multiple Choice

Graph 13-6 This graph depicts average total cost functions for a firm that produces automobiles.Use the graph to answer the following question(s) .
-Refer to Graph 13-6.If the firm is currently operating on ATCB, what options does it have if it wants to change its level of automobile production over the next couple of weeks?

• A)The firm has no options.It cannot change output level in the short run.
• B)it can operate at any level of output between points M and N
• C)it can operate at any level of output, as long as it stays on ATCD
• D)it can operate at any level of output as long as it stays on ATCB

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Definitions:

National Defense

The protective measures and military actions that a country undertakes to defend itself against threats and maintain national security.

Market Failure

Occurs when the allocation of goods and services by a free market is not efficient.

Free-rider Problem

A situation in public economics where individuals consume a good without paying for it, leading to underproduction or depletion of the good, as seen often in public goods and common resources.

Public Good

A good that is non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from its use and one person's use does not diminish its availability to others.