If ATC = $10,AVC = $6,AFC = $3 and MC

question 31

Multiple Choice

If ATC = $10,AVC = $6,AFC = $3 and MC = $5,then if output increased by one unit:

• A)MC will increase.
• B)MC will decrease.
• C)ATC will increase.
• D)MC may be increasing or decreasing.
• E)AFC will increase.

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Definitions:

Price Elasticity

An indicator of the degree to which demand for a product is affected by variations in its price, reflecting consumer sensitivity to price fluctuations.

Rock Concert

A live music performance featuring rock music by one or more artists or bands.

Tickets

Documents or electronic vouchers that grant the holder the right to enter an event, travel on public transport, or participate in an activity.

Reservation Price

The maximum price a buyer is willing to pay or the minimum price a seller is willing to accept for a good or service.