Suppose a firm's fixed costs are $100 and average variable costs are constant regardless of output. Which of the following is then true?
A) Average total cost will decrease when output is increased.
B) Average total costs will be constant.
C) Marginal cost will be less than average variable cost.
D) Marginal cost will be rising as output rises.
E) Marginal cost will equal average total cost.

Question

Quizplus · Accepted Answer

The Answer of Suppose a firm's fixed costs are $100 and average variable costs are constant regardless of output. Which of the following is then true?
A) Average total cost will decrease when output is increased.
B) Average total costs will be constant.
C) Marginal cost will be less than average variable cost.
D) Marginal cost will be rising as output rises.
E) Marginal cost will equal average total cost.

Suppose a Firm's Fixed Costs Are $100 and Average Variable