A firm's average total cost is $80, its fixed cost is $1000, and its output is 100 units. Its average variable cost
A) is less than $40.
B) is between $40 and $60.
C) is more than $60.
D) cannot be determined without more information.
C
You might also like to view...
Expected profit and the real interest rate affect investment decisions
Indicate whether the statement is true or false
Consider the case of time fixed effects only, i.e., Yit = ?0 + ?1Xit + ?3St + uit,
First replace ?0 + ?3St with ?t. Next show the relationship between the ?t and ?t in the following equation Yit = ?0 + ?1Xit + ?2B2t + ... + ?TBTt + uit, where each of the binary variables B2, …, BT indicates a different time period. Explain in words why the two equations are the same. Finally show why there is perfect multicollinearity if you add another binary variable B1. What is the intuition behind the fact that the OLS estimator does not exist in this case? Would that also be the case if you dropped the intercept? What will be an ideal response?