In a Graph of a Firm's Short-Run Total Costs and Total

question 34

Multiple Choice

In a graph of a firm's short-run total costs and total revenue,the total cost and the total revenue curves,respectively,will intersect the vertical axis

• A) above the origin, above the origin.
• B) above the origin, at the origin.
• C) at the origin, at the origin.
• D) below the origin, below the origin.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume.

Average Costs

The total costs (fixed and variable) of production divided by the total quantity of output, indicating the cost of producing each unit.

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and loan payments.

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.