Suppose a Firm Has $1,000,000 in Fixed Costs and Variable

question 59

Multiple Choice

Suppose a firm has $1,000,000 in fixed costs and variable costs equal to $100 for every unit they produce,

• A)their marginal costs are decreasing.
• B)their average costs are decreasing.
• C)their fixed costs are decreasing.
• D)the marginal costs are increasing.

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Definitions:

Number of Firms

The total count of businesses operating within a market or industry, a key factor in determining market structure and competition levels.

Downsloping Demand

A situation where demand decreases as the price increases, typically illustrated by a downward sloping demand curve.

Upsloping Supply

This describes a supply curve that slants upward from left to right, indicating that the quantity of goods supplied increases as the price rises.

Consumer Income

The total earnings of consumers, including salary, wages, and other income sources, influencing their purchasing power.