Economics 0455 · IGCSE · Firms’ costs, revenue and objectives

Firms’ costs, revenue and objectives — practice question

A firm that charges $6 a unit for its product has the following total costs. Which statement is correct?

  • AAverage cost is lowest when 10 units are produced.
  • BThe firm does not make any profit when 20 units are sold.
  • CThe firm has no fixed costs.
  • DTotal variable costs fall continuously over these outputs.

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