Firm X's Total Fixed Costs Are $1,000

question 60

Multiple Choice

Firm X's total fixed costs are $1,000. Its total variable costs of producing 100 units are $2,000, and its total variable costs of producing 200 units are $4,000. Which of the following will happen to firm X's average costs as it increases output from 100 to 200 units?

• A) Average costs increase.
• B) Average costs decrease.
• C) Average costs remain constant.
• D) Average costs increase slightly.

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