Much of the empirical evidence on the behavior of costs for real-world firms suggests that:
A) average costs functions are U-shaped as suggested by economic theory.
B) for most firms, marginal costs are declining in the range in which the firms operate.
C) for many firms, marginal and average variable costs are constant over wide ranges of output.
D) there is no relationship between the marginal and average variable costs of production.
C
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Refer to Scenario 15.6. The expected NPV of the computer purchase is approximately
A) $3,200. B) $5000. C) $10,000. D) $68,000. E) $96,000.
The profit of a firm is maximized when:
a. marginal revenue is maximum. b. marginal revenue is greater than marginal cost. c. marginal revenue is equal to marginal cost. d. marginal cost is minimum. e. marginal revenue is less than marginal cost.