Average total cost is equal to
A) average fixed cost + average variable cost.
B) total cost ÷ quantity.
C) the change in total cost when output changes by one unit.
D) Answers A and B are correct.
E) Answers A and C are correct.
D
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Which of the following arguments could be made as evidence that the market for cage-free eggs is perfectly competitive?
A) As more farmers began selling cage-free eggs, the increase in supply has driven down prices to the point where they just cover the cost of production. B) Sales of cage-free eggs have increased at a rate of 20 percent per year. C) The profits earned by farmers who sell cage-free eggs have continued to grow, despite the increasing number of farmers entering this market. D) The U.S. Department of Agriculture has established standards for the labeling of cage-free eggs.
For effective price discrimination to occur, a seller must
a. be a pure monopolist. b. have large economies of scale and control over a key natural resource. c. face a horizontal demand curve for its product. d. be able to prevent consumers from reselling the product to other consumers.