Consider two firms, A and B, which both produce product X. Total production costs consist of fixed costs and costs that vary directly with output, Q. Total costs for firm A are described by the equation TCA = 40 + 4Q, and for firm B they are described by the equation TCB = 80 + 20. From this information we can deduce that: A firm A can always produce units of output at a lower average total cost than firm B because it has lower fixed costs B marginal cost must fall as Q rises for both firms because fixed costs are spread over a higher volume of output C marginal cost rises as output rises for both firms because total costs rise as Q rises D marginal cost remains constant for both firms as Q rises I do not want to answer this question. F marginal cost is lower for firm A than for firm B

Consider two firms, A and B, which both produce product X. Total production costs consist of fixed costs and costs that vary directly with output, Q. Total costs for firm A are described by the equation TCA = 40 + 4Q, and for firm B they are described by the equation TCB = 80 + 20. From this information we can deduce that: A firm A can always produce units of output at a lower average total cost than firm B because it has lower fixed costs B marginal cost must fall as Q rises for both firms because fixed costs are spread over a higher volume of output C marginal cost rises as output rises for both firms because total costs rise as Q rises D marginal cost remains constant for both firms as Q rises I do not want to answer this question. F marginal cost is lower for firm A than for firm B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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