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At High Levels of Production in the Short Run, Total

Question 95

Multiple Choice

At high levels of production in the short run, total cost:


A) increases slowly because fixed factors are fully utilized.
B) decreases because fixed and variable costs can be spread over a larger amount of output than at low levels of production.
C) increases rapidly because fixed factors are approaching the limits of their productivity, and many variable factors are needed to compensate for the fixed factor boundary.
D) increases rapidly because the cost of hiring additional fixed factors required for larger levels of production must be added to the cost of hiring additional variable factors.

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