11) For a firm with some positive fixed costs, the average total cost is U-shaped, decreasing...
11) For a firm with some positive fixed costs, the average total cost is U-shaped, decreasing at first and, after some quantity ?0, increasing. Which of the following must be true?
a. Average fixed cost is increasing after ?0
b. The firm’s marginal cost is never higher than the firm’s average variable cost when quantity is greater than ?0
c. The firm’s average variable cost is increasing for quantities greater than ??
d. The firm’s average fixed cost reaches its lowest level when it intersects marginal cost
Homework Answers
The correct option for this case will be
C. The firm's average variable cost is increasing for quantities greater than Q0.
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11) For a firm with some positive fixed costs, the average total
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