Suppose There Are Fixed Costs and Marginal Costs That Are

question 315

Multiple Choice

Suppose there are fixed costs and marginal costs that are constant. Then we know that

• A) average total costs are also constant.
• B) average variable costs decrease continuously as output increases, and lie above the marginal cost curve.
• C) average total costs decrease continuously as output increases, and lie above the average variable cost curve, which also is decreasing continuously.
• D) average total costs decrease continuously as output increases, and lie above the average variable cost curve, which is constant.

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