Other Things Equal, If the Fixed Costs of a Firm

question 99

Multiple Choice

Other things equal, if the fixed costs of a firm were to increase by $100,000 per year, which of the following would happen?

• A)Marginal costs and average variable costs would both rise.
• B)Average fixed costs and average variable costs would rise.
• C)Average fixed costs and average total costs would rise.
• D)Average fixed costs would rise, but marginal costs would fall.

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Definitions:

IUPAC

The International Union of Pure and Applied Chemistry, an organization that sets standards for naming chemical compounds.

Compound

A mixture resulting from the chemical combination of two or more elements in exact proportions.

Anisole

A colorless liquid organic compound, essentially methoxybenzene, used in perfume and flavoring.

IUPAC

The International Union of Pure and Applied Chemistry, an organization responsible for standardizing chemical nomenclature.