Suppose a Firm Has a Variable Cost Function VC =

question 19

Multiple Choice

Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000.What kind of firm is this?

• A) This firm is a natural monopoly because as Q rises, AC falls.
• B) This firm is a natural monopoly because as Q rises, AC rises.
• C) This firm is a natural monopoly because as Q rises, VC falls.
• D) This firm is a natural monopoly because as Q rises, VC rises.

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Definitions:

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The transition of manufacturing and production processes from civilian to military goods, typically during periods of war or military buildup.

Government Military Contracts

Agreements or contracts between a government and private companies for the provision of goods and services to the military or for defense purposes.

Nation's Top Corporations

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Closed-Shop

A workplace where employment is conditional upon the employee's membership in a labor union, typically found in industries with strong union representation.