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Which of the following is true about the changes in fixed costs?

a) An increase in production will result in an increase in per unit fixed costs
b) A decrease in fixed cost will result in an increase in variable cost
c) An increase in production will result in a decrease in per unit fixed cost
d) A decrease in production will result in an increase in total fixed cost

 

 

 

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Chika Ilonah
Chika IlonahLv10
31 Oct 2020

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Related questions

The city government is considering a tax proposal:

A lumpsum tax of $300 on each producer of hamburgers.

Which of the following is true as a result of a lumpsum tax. Check all that applies.

a. average fixed cost will decrease.

b. average variable cost will increase.

c. average total cost will increase.

d. marginal cost will remain unchanged.

 

(1) With a given plant size, an increase in output will NOT result in an increase in,
a. average variable cost
b.total cost
c.total fixed cost
d.average fixed costs

(2) The change in total variable cost which accompanies one extra unit of output
a.marginal cost
b.the average variable cost
c.the average total cost
d.the average fixed cost

(3) When the total product is rising,
a. variable cost must be declining
b. the marginal cost must be positive
c. the marginal product must be negative.

 d. fixed cost must be rising

(4) For a perfectly competitive firm,
a. price is less than marginal revenue
b.there is no relationship between price and marginal revenue
c. price is greater than marginal revenue
d.price equals marginal revenue










1. A gas station operates in a monopolistically competitive market and is in short-run equilibrium. Suppose that a fixed cost for this firm decreases. As a result, the firm's price will _____, the firm's output will _____, and the firm's economic profit will _____.

A) increase; increase; increase

B) increase; increase; decrease

C) stay the same; stay the same; increase

D) decrease; stay the same; increase

2. An increase in the productivity of labor due to improved technology will:

A) result in a lower wage.

B) decrease the quantity of labor hired.

C) decrease the demand for labor.

D) increase the demand for labor.

3. A monopolistic competitor may choose to advertise in order to:

A) reduce excess capacity.

B) increase the demand for its product.

C) collude more effectively with other firms.

D) produce on the upward-sloping portion of its average total cost curve.

4. Suppose the Herfindahl-Hirschman Index (HHI) for the industry is 900. Compared to an industry with an HHI of 10,000, this market is considered:

A) a strongly competitive market.

B) a somewhat competitive market.

C) oligopolistic.

D) monopolistic.

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