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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A mechanism through which prices adjust to balance supply and demand for goods and services in an economy.

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