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A Firm with Fixed Costs Produces at the Lowest Point

Question 331

Multiple Choice

A firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then


A) average fixed cost will increase.
B) average total cost will decrease.
C) average fixed cost will necessarily be below average variable cost.
D) average total cost will be less than average variable cost.

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