-Which of the Following Statements Would Be True About a Firm

question 159

Multiple Choice

-Which of the following statements would be true about a firm which has excess capacity?

• A)Its average total cost would be at a minimum.
• B)Its average total cost would not be at a minimum.
• C)Its average total cost may or may not be at a minimum but the firm would not be at economic capacity.
• D)It would not be at capacity output,but its average total cost would be at a minimum.
• E)It would need to reduce output to achieve minimum average total cost.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used.

Representative Heuristic

A mental shortcut that involves making judgments based on how well something matches existing prototypes or stereotypes in our minds.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often leading to a solution that is good enough rather than perfect.

Mnemonic Devices

Techniques a person can use to help them improve their ability to remember something, often by associating it with familiar items or concepts.