Table 13-3 Table 13-3 Shows the Demand and Cost Schedules for a and Cost

question 157

Multiple Choice

Table 13-3

Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 13-3.What is its average variable cost of production at its optimal output level?

• A)$0 (because its optimal output = 0)
• B)$15
• C)$14.75
• D)$29

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Definitions:

Income

Earnings acquired, frequently on a steady basis, through employment or investing activities.

Consumer Equilibrium

The point at which the quantity of goods and services a consumer chooses to buy equates to the maximum satisfaction or utility for their budget.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods.

Consumer Equilibrium

The point at which an individual's income is perfectly balanced with their consumption preferences, maximizing utility.