Refer to the Accompanying Graph to Answer the Following Questions

question 146

Multiple Choice

Refer to the accompanying graph to answer the following questions.

-The average total cost (ATC) and average variable cost (AVC) converge as the level of output produced increases because

• A) the firm is able to purchase more capital and exploit economies of scale.
• B) the firm experiences gains in productivity from employee specialization.
• C) average total cost decreases as output increases.
• D) average fixed cost decreases as output increases.
• E) the firm is able to drive its competitors out of business by lowering its price.

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Definitions:

COUNTIF(range,criteria)

A function in spreadsheet software that counts the number of cells within a range that meet a specified condition.

Specified Criteria

Pre-determined standards or conditions that must be met or complied with.

Departmental Contribution

The amount of revenue contributed by a specific department after deducting its direct and indirect costs.