If an average cost pricing rule is imposed on the firm in the figure above, the firm will produce
A) 5 units.
B) 20 units.
C) 30 units.
D) 40 units.

Name: If an average cost pricing rule is imposed on the firm in the figure above, the firm will produce A) 5 units. B) 20 units. C) 30 units. D) 40 units.
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Question

Quizplus · Accepted Answer

An average cost pricing rule sets the price equal to the average total cost. The firm will produce where the average total cost curve intersects the demand curve, which is at 30 units.

If an Average Cost Pricing Rule Is Imposed on the Firm