Figure 5.1 -Refer to Figure 5.1. at a Quantity of 10, the Quantity

question 12

Multiple Choice

Figure 5.1

-Refer to Figure 5.1. At a quantity of 10, the firm should ____, but at a quantity of 75, the firm should ____.

• A) leave production unchanged; also leave production unchanged
• B) leave production unchanged; decrease production
• C) increase production; decrease production
• D) increase production; leave production unchanged
• E) decrease production; increase production

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Definitions:

Average Total Costs

The total cost of production divided by the quantity of output produced. It reflects the per-unit cost of production.

Physical Capital

Tangible assets that are used in the production process, such as machinery, buildings, and equipment.

Short Run

The short run is a period in economics during which at least one input, such as plant size or capital, is fixed, limiting the business's ability to adjust production levels fully.

Physical Capital

Physical capital encompasses the machinery, equipment, and infrastructure a business uses to produce goods or services, distinct from financial capital or human skills.