Microeconomics Test

output Total Cost 0 $ 400 1 900 2 1,300 3 1,600 4 2,000 5 2,500 6 3,100 Refer to the cost data provided. How much is the firm's total fixed costs? Multiple Choice $500 $900 Total fixed costs cannot be determined from the given data. $400

$400

Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The normal profits for Harvey in the first year were Multiple Choice $220,000. $160,000. $150,000. $5,000.

$5,000.

The table shows three short-run cost schedules for three plants of different sizes that a firm might build in the long run. Plant 1 Plant 2 Plant3 Output ATC Output ATC Output ATC 10 $10 10 $15 10 $20 20 9 20 10 20 15 30 8 30 7 30 10 40 9 40 10 40 8 50 10 50 14 50 9 If the three plant sizes shown are the only ones possible, then there are economies of scale in producing Multiple Choice up to 10 units of output, and diseconomies of scale after that. up to 30 units of output, and diseconomies of scale after that. up to 20 units of output, and diseconomies of scale after that. up to 40 units of output, and diseconomies of scale after that.

up to 30 units of output, and diseconomies of scale after that.

Laissez-faire capitalism is characterized by Multiple Choice individuals and firms abiding by a government economic plan. active government intervention in the economy. very limited government role in the economy. the economic system of the United States today.

very limited government role in the economy.

In understanding and analyzing "demand," we focus on how much of a product the buyers are Multiple Choice able to buy with their given income. willing and able to buy. willing and wanting to buy. actually buying now and in the recent past.

willing and able to buy.

If the price of Pepsi decreases, other factors constant, then we'd expect to see a consequent shift of the demand curve for Multiple Choice Coke to the left. Coke to the right. Pepsi to the left. Pepsi to the right.

Coke to the left.

The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules,D1, D2, D3, and D4, respectively. A 2-percent increase in price will result in an increase in total revenues in which of the following cases? Multiple Choice D1, D2, and D3 D1 and D4 D1 and D3 D2 and D4

D2 and D4

The scalping of tickets for an event is a sign that the stated price on the ticket is Multiple Choice below the market clearing price. equal to the quantity demanded. equal to the market clearing price. above the market clearing price.

below the market clearing price.

To the average consumer, the marginal utility of a second copy of today's newspaper is Multiple Choice close to zero. close to one. constant. increasing.

close to zero.

If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be Multiple Choice economies of scale. increasing average total costs. constant returns to scale. diseconomies of scale.

constant returns to scale.

A budget line is a graph that shows the various combinations of two products that a Multiple Choice household can produce with a given amount of resources. consumer can buy with a given amount of money income. business firm can produce with a given budget. nation can trade with another nation.

consumer can buy with a given amount of money income.

The demand for a product is inelastic with respect to price if Multiple Choice a drop in price is accompanied by an increase in the quantity demanded. consumers are largely unresponsive to a per unit price change. a drop in price is accompanied by a decrease in the quantity demanded. the elasticity coefficient is greater than 1.

consumers are largely unresponsive to a per unit price change.

In 2015 the federal government started requiring restaurants to print calorie counts next to menu items. The intent was to persuade consumers to Multiple Choice minimize total utility out of their spending. compare marginal utility against calorie counts. control and reduce their total calorie intake. maximize the calories per dollar spent.

control and reduce their total calorie intake.

The resource cost falls in a purely competitive industry. This change will result in a(n) Multiple Choice increase in marginal cost for firms in the industry and an increase in the industry supply curve. increase in marginal cost at each output level for firms in the industry and an increase in the industry supply curve. decrease in marginal cost for firms in the industry and an increase in the industry supply curve. decrease in marginal cost for firms in the industry and a decrease in the industry supply curve.

decrease in marginal cost for firms in the industry and an increase in the industry supply curve.

A decrease in demand and an increase in supply will Multiple Choice increase price and increase the equilibrium quantity. increase price and affect the equilibrium quantity in an indeterminate way. decrease price and affect the equilibrium quantity in an indeterminate way. affect price in an indeterminate way and decrease the equilibrium quantity.

decrease price and affect the equilibrium quantity in an indeterminate way.

If firms are losing money in a purely competitive industry, then the long-run adjustments in this situation will cause the market supply to Multiple Choice decrease, and consequently the representative firm's profits will increase. decrease, and consequently the representative firm's profits will decrease. increase, and consequently the representative firm's profits will increase. increase, and consequently the representative firm's profits will decrease.

decrease, and consequently the representative firm's profits will increase.

The best output or the optimal production of the nation is Multiple Choice the production combination where the opportunity costs are minimized. a combination of products at the midpoint of the production possibilities curve. determined by equalizing the marginal benefits and marginal costs of each product. a combination of products at either of the two endpoints of the production possibilities curve.

determined by equalizing the marginal benefits and marginal costs of each product.

The reason the marginal cost curve eventually increases as output increases for the typical firm is because of Multiple Choice diminishing marginal utility. increasing opportunity cost. diseconomies of scale. diminishing marginal returns.

diminishing marginal returns.

An industry is expected to expand if firms in the industry are earning positive Multiple Choice economic profits. total revenues. accounting profits. normal profits.

economic profits.

If there is allocative efficiency in a purely competitive market for a product, the maximum price consumers are willing to pay is Multiple Choice equal to the amount of efficiency or deadweight losses. equal to the minimum price producers are willing to accept. greater than marginal cost. less than marginal benefit.

equal to the minimum price producers are willing to accept.

Cuba is a command economy that suffered a decline in economic growth because of a cut in the aid provided by the former Soviet Union when the latter collapsed. As a consequence, Cuba Multiple Choice moved from one point to another along its existing production possibilities curve. went to a point inside its production possibilities curve. experienced an outward shift of its production possibilities curve. experienced an inward shift of its production possibilities curve.

experienced an inward shift of its production possibilities curve.

Increasing the share of your income that you save is good for you. Therefore, it would be good for the whole economy if everyone saved more. This exemplifies the Multiple Choice use of loaded terminology. confusion between correlation and causation. fallacy of composition. post hoc fallacy.

fallacy of composition.

A nation can increase its production possibilities by Multiple Choice shifting resources from private goods to public goods. eliminating unemployment. shifting resources to produce more consumer goods and less investment goods. improving labor productivity.

improving labor productivity.

The MR = MC rule applies Multiple Choice in the long run but not in the short run. only to a purely competitive firm. in the short run but not in the long run. in both the short run and the long run.

in both the short run and the long run.

The main difference between the short run and the long run is that Multiple Choice in the long run, all inputs are fixed. the long run always refers to a time period of one year or longer. in the short run, some inputs are fixed and some are variable. firms earn zero profits in the long run.

in the short run, some inputs are fixed and some are variable.

In the circular flow diagram, households get their ability to pay for their consumption expenditures from the Multiple Choice incomes they earn for their resources. goods and services they get in the product markets. costs they incur for resources. revenues they receive for their products.

incomes they earn for their resources.

A decrease in the price of digital cameras would lead to a(n) Multiple Choice decrease in the price and an increase in quantity sold of memory cards. increase in the price and a decrease in quantity sold of memory cards. increase in the price and quantity sold of memory cards. decrease in the price and quantity sold of memory cards.

increase in the price and quantity sold of memory cards.

If the demand for product X is inelastic, a 4 percent decrease in the price of X will Multiple Choice decrease the quantity of X demanded by less than 4 percent. increase the quantity of X demanded by more than 4 percent. decrease the quantity of X demanded by more than 4 percent. increase the quantity of X demanded by less than 4 percent.

increase the quantity of X demanded by less than 4 percent.

An increase in the productivity of labor over time will Multiple Choice decrease the demand for consumer goods and services. decrease the value of time. increase the value of time. decrease the demand for labor-saving devices.

increase the value of time.

PriceQuantity Supplied $10 10 8 9 6 8 4 7 2 6 Refer to the table. Over the $8-$6 price range, supply is Multiple Choice inelastic. elastic. perfectly elastic. perfectly inelastic.

inelastic.

A state government wants to increase the taxes on cigarettes to increase tax revenue. Because cigarettes are addictive, we would expect its demand to be Multiple Choice inelastic. Thus,the government's cigarette-tax revenues would rise with a tax increase. elastic. Thus, the government's cigarette-tax revenues would rise with a tax increase. inelastic. Thus,the government's cigarette-tax revenues would fall with a tax increase. elastic. Thus, the government's cigarette-tax revenues would fall with a tax increase.

inelastic. Thus,the government's cigarette-tax revenues would rise with a tax increase.

A purely competitive firm does not try to sell more of its product by lowering its price below the market price because Multiple Choice its demand curve is inelastic, so total revenue will decline. it can sell all it wants to at the market price. its competitors would not permit it. this would be considered unethical price chiseling.

it can sell all it wants to at the market price.

The demand for autos is likely to be Multiple Choice of the same price elasticity as the demand for Honda Accords. more price elastic than the demand for Honda Accords. perfectly inelastic. less price elastic than the demand for Honda Accords.

less price elastic than the demand for Honda Accords.

If you purchase a gift worth $25 for your sister, but your sister would be willing to pay only $10 ifshe bought the item for herself, then the Multiple Choice loss of value in the gift is $15. total utility of the gift is $15. total utility of the gift is $35. marginal utility of the gift is $15.

loss of value in the gift is $15.

Over the range of output where the slope of the short-run total cost curve becomes steeper, Multiple Choice marginal cost is lower than average variable cost. fixed costs are increasing. marginal cost is positive but decreasing. marginal cost is increasing.

marginal cost is increasing.

arlee's Kreations sells handbags in a purely competitive market. Karlee's is currently breaking even. Based on this information, we can conclude that Karlee's Kreations Multiple Choice may be operating in either short-run or long-run equilibrium. must be operating in long-run equilibrium. will leave this market in the long run because no economic profits are being earned. will continue operating in this market only if the market price rises.

may be operating in either short-run or long-run equilibrium.

The law of diminishing returns in a manufacturing plant of a fixed capacity implies that, eventually, employing one Multiple Choice fewer worker will not affect the average amount of output per worker. more worker will decrease the average amount of output per worker. fewer worker will decrease the average amount of output per worker. more worker will increase the average amount of output per worker.

more worker will decrease the average amount of output per worker.

In introducing the opportunity cost of time into the theory of consumer behavior, we find that, all else equal, Multiple Choice one should consume more of time-intensive goods. the marginal utility derived from each product must be multiplied by consumption time in determining equilibrium. one should consume less of time-intensive goods. the consumer's equilibrium position is not altered.

one should consume less of time-intensive goods.

Suppose that a consumer purchases just two goods, X and Y. The slope of the budget line would indicate the Multiple Choice maximum quantity of good Y that the consumer could buy with a given budget. opportunity cost of good X in terms of good Y given up for each unit of X. opportunity cost of good Y in terms of good X given up for each unit of Y. maximum quantity of good X that the consumer could buy with a given budget.

opportunity cost of good X in terms of good Y given up for each unit of X.

Another way of saying "ceteris paribus" is Multiple Choice in reality. in general. other things equal. because of this.

other things equal.

Businesses seeking higher profits and resource suppliers seeking higher incomes lead to changes in the allocation of resources among different firms and end up with Multiple Choice output that society wants. a need for government action. consumers at the losing end. unnecessary conflict and turmoil.

output that society wants.

If a firm is a price taker, then the demand curve for the firm's product is Multiple Choice equal to the total revenue curve. unit elastic. perfectly inelastic. perfectly elastic.

perfectly elastic.

The plusses and minuses of the patent system include the following except Multiple Choice possibly hindering creative destruction, especially in complex products that encompass several patents. preventing the existence of "patent trolls" or firms whose main purpose is to sue companies. allowing stodgy old firms to survive longer than they should against innovative rivals. giving inventors an incentive to bear the research and development costs of new products.

preventing the existence of "patent trolls" or firms whose main purpose is to sue companies.

With specialization in a market economy, individual Multiple Choice consumers have to produce most of what they consume. producers consume most of the output that they produce. firms produce a wide range of products. producers consume little or none of the products they produce.

producers consume little or none of the products they produce.

Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py = 25 and MUz/Pz = 20. To maximize utility, without spending more money, the consumer should Multiple Choice purchase less of Y and more of Z. purchase more of Y and less of Z. make no change in the quantities Y and Z. purchase more of both Y and Z.

purchase more of Y and less of Z.

In which market model are the conditions of entry into the market easiest? Multiple Choice pure monopoly pure competition monopolistic competition oligopoly

pure competition

Which market model assumes the least number of firms in an industry? Multiple Choice pure competition pure monopoly monopolistic competition oligopoly

pure monopoly

The supply curve of antique reproductions is Multiple Choice relatively inelastic. unit elastic. perfectly inelastic. relatively elastic.

relatively elastic.

A characteristic of the market system is Multiple Choice avoidance of producing goods that do not satisfy consumer wants directly. reliance on the use of capital goods in in direct modes of production. a focus on labor, as opposed to capital resources. extensive use of direct or manual methods of production.

reliance on the use of capital goods in in direct modes of production.Correct

The money income of households consists of all the following, except Multiple Choice wages. revenues. interest. profits.

revenues.

A patent is the legal right granted to a firm that allows it to Multiple Choice sell its new product exclusively for a set number of years. make copies of other firm's products. be the sole buyer of a particular product or resource. be the exclusive distributor of a particular imported product.

sell its new product exclusively for a set number of years.

A long-run supply curve that is downward-sloping indicates that the firms' ATC curves Multiple Choice shift up when the industry expands. shift down when the industry contracts. do not shift when the industry contracts. shift down when the industry expands.

shift down when the industry expands.

A long-run supply curve that is downward-sloping indicates that the firms' ATC curves Multiple Choice shift up when the industry expands. shift down when the industry expands. shift down when the industry contracts. do not shift when the industry contracts.

shift down when the industry expands.

When the price of a product rises for an inferior good, the Multiple Choice income and substitution effects will encourage consumers to purchase more of the product. income and substitution effects will encourage consumers to purchase less of the product. substitution effect will encourage consumers to purchase less of the product, but the income effect will encourage them to purchase more. substitution effect will encourage consumers to purchase more of the product, but the income effect will encourage them to purchase less.

substitution effect will encourage consumers to purchase less of the product, but the income effect will encourage them to purchase more.

A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $4. It was also found that total revenue decreased when price was raised from $5 to $6. Thus, Multiple Choice the demand for pizza is elastic both above and below $5. $5 is not the equilibrium price of pizza. the demand for pizza is elastic above $5 and inelastic below $5. the demand for pizza is inelastic above $5 and elastic below $5.

the demand for pizza is elastic above $5 and inelastic below $5.

The increase in demand for iPad tablet computers can be explained by Multiple Choice an increase in the technology used to produce iPads, making the supply of iPads increase. the enhanced versatility and storage capacity of iPads, making their MU/P increase. an increase in the price of laptop computers, making their MU/P decrease. an increase in the income of buyers, making the demand for iPads increase.

the enhanced versatility and storage capacity of iPads, making their MU/P increase.

What is a major opportunity cost of going to college on a full-time basis? Multiple Choice the forgone income that would have been earned working in a full-time job the cost of living expenses (room and board) to attend college the cost of transportation to college instead of to a job the greater income that will be earned from having a college degree

the forgone income that would have been earned working in a full-time job

A black market could arise as a result of Multiple Choice the imposition of a legal price ceiling below the equilibrium price. the imposition of a legal price floor at the equilibrium price. the imposition of a legal price ceiling above the equilibrium price. the imposition of a legal price floor below the equilibrium price.

the imposition of a legal price ceiling below the equilibrium price.

Which of the following is considered an economic resource? Multiple Choice the HD-TV sets in people's homes shoppers buying stuff at the mall the land that is designated as national parks by the government the ice cream that kids buy at the ice cream parlor

the land that is designated as national parks by the government

When the Defense Department ordered 132 new airplanes, the cost per plane was estimated to be $580 million. A cut in the order to 75 planes increased the per plane cost to $800 million. This change in per unit cost can be explained by Multiple Choice an increase in total fixed cost. a move to minimum efficient scale. the law of diminishing returns. the loss of economies of scale.

the loss of economies of scale.

Farmers often find that large bumper crops are associated with declines in their gross incomes. This suggests that Multiple Choice farm products are inferior goods. farm products are normal goods. the price elasticity of demand for farm products is greater than 1. the price elasticity of demand for farm products is less than 1.

the price elasticity of demand for farm products is less than 1.

A characteristic of centrally planned economies is that Multiple Choice the price is relatively unimportant in allocating resources. there are many incentives for innovation and hard work. profits are the main measure of success of a firm. entrepreneurship is quite prevalent and highly rewarded.

the price is relatively unimportant in allocating resources.

A negative income elasticity of demand coefficient indicates that Multiple Choice the product is a substitute good. the product follows the law of demand. the product is an inferior good. the product is a complementary good.

the product is an inferior good.

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is that Multiple Choice the real income of the consumer has been increased. the product is now relatively more expensive than it was before. other products are now relatively more expensive than they were before. the real income of the consumer has been decreased.

the product is now relatively more expensive than it was before.

The process of observing real-world behavior, developing hypotheses, testing them against facts, then using the results to construct theories is called Multiple Choice opportunity cost estimation. normative analysis. the scientific method. marginal analysis.

the scientific method.

he table shows the utility schedule for a consumer of candy bars. Number Consumed Total Utility 0 0 1 5 2 11 3 18 4 24 5 30 6 35 7 32 The consumption of which bar yields the greatest marginal utility? Multiple Choice fourth. second. third. sixth.

third.

When diminishing marginal utility starts happening as a person consumes more and more of a given good, Multiple Choice total utility will become negative. total utility will increase at a diminishing rate. total utility will diminish. marginal utility will become negative.

total utility will increase at a diminishing rate.

Suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 to 118. Then the absolute value of the price elasticity (using the midpoint formula) is Multiple Choice 3.94. 1.37. 4.00. 2.09.

1.37.

A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table. Number of Items MU of Chocolates MU of Hard Candies 1 60 150 2 50 140 3 40 120 4 30 100 5 20 80 6 10 70 7 5 50 8 0 20 Which combination would give the child the maximum utility out of spending $4? Multiple Choice 6 chocolates and 2 hard candies 2 chocolates and 4 hard candies 0 chocolates and 5 hard candies 4 chocolates and 3 hard candies

2 chocolates and 4 hard candies

A consumer's weekly income is $300, and the consumer buys 5 bars of chocolate per week. When income increases to $330, the consumer buys 6 bars per week. The income elasticity of demand for chocolate by this consumer is about Multiple Choice 0. 0.5. 2. 1.

2.

If the total utility from consuming five units of a product is 245 and the marginal utility of a sixth unit is 5, then the total utility from consuming six units would be Multiple Choice 1,225. 250. 240. 49.

250.

Assume that the only variable resource used to produce output is labor. Amount of Labor Total Product 1 6 2 16 3 24 4 30 5 34 6 36 Refer to the provided table. With diminishing marginal returns, if the firm hires seven units of labor, which of the following numbers would most probably be the total product? Multiple Choice 40 38 39 37

37

Given the accompanying table, what is the short-run profit-maximizing level of output for the firm? Output Total Revenue Total Cost 1 $4 2 2 8 3 3 12 6 4 16 9 5 20 14 Multiple Choice 4 units 2 units 3 units 5 units

4 units

The supply of product X is inelastic (but not perfectly inelastic) if the price of X rises by Multiple Choice 8 percent and quantity supplied rises by 8 percent. 10 percent and quantity supplied remains the same. 7 percent and quantity supplied rises by 5 percent. 5 percent and quantity supplied rises by 7 percent.

7 percent and quantity supplied rises by 5 percent.

Total Revenue$3,000 Per WeekTotal Variable Cost$2,000 Per WeekTotal Fixed Cost$2,000 Per Week Let us suppose Harry's, a local supplier of chili and pizza, has the revenue and cost structure shown here. Multiple Choice Harry's should stay open in the long run. Harry's should stay open in the short run. Harry's should shut down in the short run. Harry's should shut down in the short run but reopen in the long run.

Harry's should stay open in the short run.

Which is one of the five fundamental questions that need to be dealt with in any economic system? Multiple Choice How will goods and services be produced? What makes the rate of unemployment low? How high should the prices of goods and services be? Who will be the richest group in the economy?

How will goods and services be produced?

Chuck has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer? Multiple Choice It is impossible to tell. It will increase. It will decrease. It will not change.

It will decrease.

Which is necessarily true for a purely competitive firm in short-run equilibrium? Multiple Choice Price minus average total cost equals zero. Total revenue minus total cost equals zero. Marginal revenue is zero. Marginal revenue minus marginal cost equals zero.

Marginal revenue minus marginal cost equals zero.

Suppose the income elasticity of demand for toys is +2.00. This means that Multiple Choice a 10 percent increase in income will decrease the purchase of toys by 2 percent. a 10 percent increase in income will increase the purchase of toys by 20 percent. a 10 percent increase in income will increase the purchase of toys by 2 percent. toys are an inferior good.

a 10 percent increase in income will increase the purchase of toys by 20 percent.

Which would cause an increase in the supply curve of cell-phone services? Multiple Choice an increase in the taxes paid by cell-phone service providers a decrease in the wages of cell-phone company workers an increase in the price of cell-phone services a decrease in a subsidy given to cell-phone service providers

a decrease in the wages of cell-phone company workers

If a more efficient technology was discovered by a firm, there would be Multiple Choice an upward shift in the AFC curve. an upward shift in the AVC curve. a downward shift in the AFC curve. a downward shift in the MC curve.

a downward shift in the MC curve.

Which of the following statements about ticket scalping is correct? Multiple Choice Scalping benefits only one party—the buyers—but not the sellers. Scalping tends to be prevalent when there is a shortage of tickets. Scalping benefits only one party—the sellers—but not the buyers. Scalping tends to be prevalent when there is a surplus of tickets.

Scalping tends to be prevalent when there is a shortage of tickets.

Which of the following best describes the "invisible hand" concept? Multiple Choice The market system works best when resources are free to move from one use to another. The problem of scarcity can best be overcome in a system of mixed capitalism. Ample regulation of business by the government will maximize the public's best interests. Self-interest in a market system will automatically promote the public interest as well.

Self-interest in a market system will automatically promote the public interest as well.

If sellers could price-discriminate and charge two different prices to two different groups of buyers in order to increase revenues, then the sellers would charge Multiple Choice a higher price to the buyers whose demand is inelastic. the same price, actually, because price-discrimination will result in lower revenues. a higher price to the buyers whose demand is unit-elastic. a higher price to the buyers whose demand is elastic.

a higher price to the buyers whose demand is inelastic.

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is Multiple Choice a straight horizontal line. a straight downward-sloping line. an upward-sloping line. Incorrect a vertical line.

a straight downward-sloping line.

Which of the following statements is false? Multiple Choice Firms may continue operating at a loss in the short run. The short run refers to a period of less than one year. In the long run, all inputs can vary in quantity. In the long run, firms would not continue operating at a loss.

The short run refers to a period of less than one year.

Which of the following is true of normal profits? Multiple Choice They are zero under pure competition in the long run. They are excluded from a firm's costs of production. They are necessary to keep a firm in the industry in the long run. They are what attract other firms to enter an industry.

They are necessary to keep a firm in the industry in the long run.

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain Multiple Choice allocative efficiency. minimum opportunity costs. maximum process and revenues. productive efficiency.

allocative efficiency.

Many people have turned to the Internet to get the news. This has caused the circulation numbers of newspapers to fall drastically, which in turn caused their Multiple Choice marginal costs to increase. average total costs to decrease. average fixed costs to increase. average fixed costs to decrease.

average fixed costs to increase.

In long-run equilibrium under pure competition, all firms will produce at minimum Multiple Choice marginal cost. average variable cost. average total cost. total cost.

average total cost.