Consider a Firm's Short-Run Cost Curves

question 43

Multiple Choice

Consider a firm's short-run cost curves.If average total cost is increasing as output rises,then

• A)total fixed costs must be increasing.
• B)average fixed costs must be increasing.
• C)average variable cost must be increasing.
• D)marginal cost must be below average total cost.
• E)average total cost is no longer equal to the sum of average variable cost and average fixed cost.

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Definitions:

Produce

To create, manufacture, or grow goods and services for consumption or sale.

Firm

A business or company engaged in commercial, professional, or industrial activities.

Maximum Profit

The highest possible financial gain a business can achieve in a given period, optimized through revenue and cost management.

Market Price

The current price at which an asset or service can be bought or sold in a given market, determined by supply and demand dynamics.