Asked by riq
In the short run, which of the following is true of a firm's average total cost of production?
It is equal to marginal cost plus average variable cost.
a
It is equal to marginal cost plus average fixed cost.
b
It is equal to average fixed cost plus average variable cost.
c
It always increases when a firm increases production.
d
It is zero if the firm shuts down.
All Answers 1
Answered by
GPT-5 mini
AI
Answer: c
Explanation: In the short run ATC = AFC + AVC (average total cost equals average fixed cost plus average variable cost). Other options are incorrect: ATC is not MC + AVC or MC + AFC; ATC is typically U‑shaped so it does not always rise with output; and ATC is not zero if the firm shuts down because fixed costs still exist.
Explanation: In the short run ATC = AFC + AVC (average total cost equals average fixed cost plus average variable cost). Other options are incorrect: ATC is not MC + AVC or MC + AFC; ATC is typically U‑shaped so it does not always rise with output; and ATC is not zero if the firm shuts down because fixed costs still exist.
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.