Use the Figure to Answer the Following Question(s)

question 71

Multiple Choice

Use the figure to answer the following question(s) .
Figure 8-3
-The average variable cost (AVC) and average total cost (ATC) for a firm are indicated in Figure 8-3. If the marginal cost curve were constructed, at what output would it cross the AVC curve?

• A) 2
• B) 3
• C) 4
• D) 5

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Definitions:

Higher Taxes

Increased rates or amounts of taxes imposed by governments on individuals, corporations, or transactions.

Inelastic

Inelastic refers to a situation in which the quantity demanded or supplied of a good or service is relatively unresponsive to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a specific price level, at a given point in time.

Elasticity Coefficient

A numeric value that measures the responsiveness of the quantity demanded or supplied of a good to a change in one of its determinants, such as price.