Refer to Figure 11-5. Curve G approaches curve F because
A) marginal cost is above average variable costs.
B) fixed cost falls as capacity rises.
C) average fixed cost falls as output rises.
D) total cost falls as more and more is produced.
Ans: C) average fixed cost falls as output rises.
Economics
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The "real" interest rate charged on a loan is the
A) prime rate. B) prime rate plus the risk premium. C) the rate charged minus the costs of supplying credit. D) the rate charged minus the expected rate of inflation.
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Which of the following occurs when an externality is internalized?
A) Higher social well-being B) Higher private benefit C) Larger deadweight loss D) Higher returns to scale
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