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Economics · Oct / Nov 2016 · Paper 12 · Question 14

2281Firms’ costs, revenue and objectives

A firm has fixed costs of $200 for its daily output. The table shows its daily total variable costs. What can be concluded about the firm's average total cost?

  1. Ait falls continuously
  2. Bit is highest at output 4 units
  3. Cit is lowest at output 4 units
  4. Dit rises continuously

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Correct answer: C. it is lowest at output 4 units

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