Figure 7.1 shows the U-shaped cost curves for a producer. In the figure below, A is the marginal cost curve, B is the average variable cost curve, and C is the average total cost curve. When output is 10, then:
Figure 7.1

A) total cost equals $80.
B) fixed cost equals $10.
C) variable cost equals $70.
D) marginal cost equals $10.
E) fixed cost equals $7.
Correct Answer:
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