A Firm's Average Fixed Cost When Producing 2,000 Units of Output

question 11

Multiple Choice

A firm's average fixed cost when producing 2,000 units of output equals $10.When only 1,000 units of output are produced:

• A)AFC must still equal $10.
• B)AFC must equal $20.
• C)AFC must equal $5.
• D)marginal cost must equal $20.
• E)marginal cost must equal $10.

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Definitions:

Legally Sufficient Consideration

refers to something of value or a promise exchanged between parties in a contract that is recognized by law as adequate to establish a binding agreement.

Preexisting Duty

An obligation that a party is already legally required to perform, which cannot serve as the basis for new consideration in a contract.

Sump Pump

A device used to remove accumulated water from a sump basin, commonly found in the basements of homes.

Moral Obligation

A duty or commitment that is not legally enforceable but is based on ethical or moral considerations.