Marginal cost
A. always equals average cost.
B. is the increase in total cost resulting from producing one more unit.
C. equals the increase in AVC resulting from producing one more unit.
D. is the average cost of production divided by output.
Answer: B
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Refer to Figure 10.3. A negative demand shock with no change in the real interest rate is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a shift from IS2 to IS1 B) a shift from AE2 to AE3; a shift from IS1 to IS2 C) a shift from AE2 to AE1; a movement from point B to point A D) a shift from AE3 to AE1; a movement from point C to point A
A market situation in which a large number of firms produce similar but not identical products is called
A) pure monopoly. B) monopolistically competitive. C) oligopolistic behavior. D) perfectly competitive.