Even though fixed costs do not affect the output decision, an increase in fixed costs results in a wider range of prices for which the firm operates at a loss
Indicate whether the statement is true or false
True . An increase in fixed costs will shift AC upward but leave AVC unchanged. The gap between AVC and AC represents prices at which the firm will operate at a loss.
Economics
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Figure 10.2 A Macroeconomic Model with Government Spending and Taxes
What will be an ideal response?
Economics
Since most people would be willing to pay far more for a cup of diamonds than for a cup of water,
A) diamonds provide more satisfaction to most people than water provides. B) most people are irrational when it comes to prestige or status goods. C) most people wrongly think they value diamonds more highly than water. D) people's choices and preferences are often inconsistent. E) very few people are ever in danger of dying of thirst.
Economics