Answered: 1 Average fixed cost equals a. Average…

1 Average fixed cost equals a. Average total cost minus average variable cost b. Total variable cost divided by the level of output c Both A) and B) d. Neither A) nor B)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 23RQ: Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost,...

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Question

1 Average fixed cost equals
a. Average total cost minus average variable cost
b. Total variable cost divided by the level of output
c. Both A) and B)
d. Neither Aj nor B)

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What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost, variable costs, and marginal cost?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
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