Suppose a Firm Has a Variable Cost Function VC =

question 48

Multiple Choice

Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000.What is the firm's average cost function?

• A) AC = 50,000 + 20Q
• B) AC = (50,000/Q) + 20
• C) AC = 50,000 + 40Q
• D) AC = 20

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Definitions:

Aptitude Test

A standardized test designed to measure an individual's potential to acquire certain skills or knowledge.

Expected Performance

Anticipated or forecasted level of achievement or output based on certain criteria or conditions.

Predictor Variable

A variable that is used to make a prediction of an individual’s score on another variable (the criterion variable). Conceptually similar to an independent variable.

Aptitude Test

An examination designed to measure an individual’s potential to acquire skills or knowledge.