The Table Given Below Shows the Total Fixed and Variable

question 99

Multiple Choice

The table given below shows the total fixed and variable costs of a firm. Table 7.3
If the firm described in Table 7.3 decides to produce nothing, which of the following would be true?

• A)Total cost will become zero.
• B)Total variable cost will become $30.
• C)Total cost will equal $40.
• D)Average total cost will equal zero.
• E)Marginal cost will equal $10.

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Definitions:

Concentration Ratio

A measure indicating the market share of the largest firms in an industry to assess the degree of competition.

Breakfast Cereal Industry

The sector of the economy that specializes in the production, marketing, and sale of breakfast cereal products.

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition and possibly higher prices.

Imperfectly Competitive Markets

Markets where individual sellers have some control over prices due to lack of perfect competition, often characterized by product differentiation, barriers to entry, or a limited number of firms.