Answered: In the short run, when a firm produces…

In the short run, when a firm produces 60 units of output, its total fixed cost is $120. Then the corresponding average total cost must be larger than $2.

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 19RQ: What shapes would you generally expect each of the following cost curves to have: fixed costs,...

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Question

7 In the short run, when a firm produces 60 units of output, its total fixed cost is $120. Then the corresponding average total cost must be larger than $2.

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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