The Table Given Below Shows the Total Fixed and Variable

question 21

Multiple Choice

The table given below shows the total fixed and variable costs of a firm. Table 7.3
Using the information in Table 7.3 we can conclude that the marginal-cost curve intersects the average-variable-cost curve at ____ unit(s) of output.

• A)1
• B)2
• C)5
• D)4

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Definitions:

Minimum Efficient Scale

The smallest amount of production a company can achieve while still taking full advantage of economies of scale with regards to minimizing its costs.

Long-Run ATC

The average total cost of production when all inputs, including capital, are variable and the scale of production can change.

Diseconomies of Scale

The phenomenon where operational costs per unit increase as the output increases, often due to inefficiencies or management challenges.

Natural Monopoly

A market structure where a single supplier is most efficient in producing or providing goods or services due to high fixed or startup costs, making competition less viable.