A Firm with Fixed Costs Produces at the Lowest Point

question 10

Multiple Choice

A firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then

• A)average fixed cost will increase.
• B)average total cost will decrease.
• C)average fixed cost will necessarily be below average variable cost.
• D)average total cost will be less than average variable cost.

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Definitions:

Neurotransmitters

Chemical messengers that transmit signals across the synaptic gaps between neurons, influencing various functions of the body and mind.

Morphine Antagonists

Substances that block or counteract the effects of morphine on the nervous system, often used to treat drug overdoses.

Motor Neuron

A type of neuron that transmits signals from the brain or spinal cord to muscles or glands, facilitating movement and action.

Leg Muscle

Muscle groups in the leg, responsible for movement and stability, including the quadriceps, hamstrings, and calves.