Suppose Marginal Cost Is $5

question 79

Multiple Choice

Suppose marginal cost is $5.Average variable costs are $10.For the next unit of output produced,average variable costs will be

• A) less than $10.
• B) more than $10.
• C) equal to $10.
• D) It is impossible to say.

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Definitions:

Market Structures

The organizational and competitive characteristics of markets, defining the nature of competition and pricing within a market, including monopolies, oligopolies, and perfect competition.

Oligopoly

A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.

Perfectly Competitive Industry

An industry that meets the criteria for perfect competition, meaning it includes many small firms producing identical products and allows for free entry and exit.

Total Surplus

The sum of consumer surplus and producer surplus in a market; it measures the total benefit to society from the production and consumption of goods and services.