If ATC = $10, AVC = $8, AFC = $2

question 68

Multiple Choice

If ATC = $10, AVC = $8, AFC = $2 and MC = $12, for a given level of output Q, then:

• A) the firm must be operating on the downward-sloping section of its ATC curve.
• B) the firm must be operating on the upward-sloping section of its AFC curve.
• C) the firm must be operating on the upward-sloping section of its ATC curve.
• D) it is uncertain from the figures given where the firm is operating.

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Definitions:

Secured Lending

A loan or extension of credit where the borrower pledges an asset as collateral to ensure repayment, reducing the risk for the lender.

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay according to the agreement.

Procure Proceeds

The act of obtaining money or benefits as a result of conducting some activity, often related to business transactions.

Principal Revokes

The act of a principal canceling or withdrawing the authority previously granted to an agent, effectively terminating the agent's ability to act on behalf of the principal.