Economics · Oct / Nov 2021 · Paper 12 · Question 14

The table shows the average total cost of a firm over a range of output. | output (units) | average total cost ($) | |---|---| | 1 | 10 | | 2 | 8 | | 3 | 6 | | 4 | 5 | | 5 | 7 | | 6 | 9 | What happens after 4 units are produced?

1. AThe firm experiences management problems.
2. BThe firm gains the benefits of merging with another firm.
3. CThe firm pays lower interest rates to banks.
4. DThe firm receives significant discounts from bulk buying.

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