In the Short Run,average Total Costs at First Decrease and Then

question 45

Multiple Choice

In the short run,average total costs at first decrease and then increase as more output is produced because

• A) marginal cost is at first greater than average total costs,then falls below it.
• B) average fixed costs continually decrease.
• C) average variable costs at first decrease and then increase at the same level of output.
• D) total cost continually increases.
• E) marginal cost is at first less than average total costs,then rises above it.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specific period.

Shrimp Market

A specific sector within the food industry focusing on the buying, selling, and distribution of shrimp.

Price Ceiling

A legal limit set by the government on how high the price of a good or service can be charged in the market.

Shrimp Sales

The commercial activity of selling shrimp, a popular seafood, either cultivated or wild-caught, in various markets.