Reading 17: Output and Costs LOS a: Differentiate between short-run and long-run decision time frames 1.A firm realizes that it is producing more than the profit maximizing level of output and makes a short-run decision to decrease its output. Which of the firm’s cost measures is least likely to decrease as a result? A) Average variable cost. B) Average total cost. C) Marginal cost. D) Average fixed cost. The correct answer was D) A short-run decrease in output will cause a firm’s average fixed costs to increase because its fixed costs are spread over a smaller number of units. In terms of cost curves, average fixed cost never slopes upward, so a decrease in output never reduces average fixed costs. The average variable cost, average total cost, and marginal cost curves all have upward sloping components along which a lower level of output would result in a lower cost.
 reading 17 习题.rar (88.18 KB)
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发表于 2008-1-22 19:09
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