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Consider an Industry in Which, for Each Individual Firm in the Industry

Question 87

Multiple Choice

Consider an industry in which, for each individual firm in the industry, cost per unit of output declines as the individual firm's output increases. If there is an increase in the number of firms in this industry whereas the market size stays the same, then the


A) marginal cost at each firm decreases because each firm produces more.
B) average total cost at each firm increases because each firm produces less.
C) marginal cost at each firm increases because each firm produces more.
D) average total cost at each firm decreases because each firm produces more.
E) average total cost at each firm decreases because each firm produces less.

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