A Firm Has Positive Fixed Cost and Positive Variable Cost

question 5

Multiple Choice

A firm has positive fixed cost and positive variable cost.At its current level of output, marginal cost equals average cost.The firm must

• A)not be producing at its profit-maximizing level of output.
• B)be producing the quantity that minimizes average cost.
• C)be operating at a point at which total variable cost equals total fixed cost.
• D)be earning negative profit.

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Definitions:

Tendon

A band of fibrous connective tissue that connects muscle to bone, facilitating movement by transmitting forces.

Cartilage

A flexible, rubbery connective tissue found in various parts of the body, including the joints, ear, and nose, that provides support and reduces friction.

Deltoid

A large, triangular muscle covering the shoulder joint that is responsible for lifting the arm and giving the shoulder its range of motion.

Abducts

Refers to the movement of a body part away from the central axis or midline of the body.