Economics (AS & A Level) · Oct / Nov 2025 · Paper 34 · Question 5
9708Types of cost, revenue and profit, short-run and long-run production
A firm has fixed costs of $300 and can produce two units per hour. Its total variable costs are $200 for one unit and $300 for two units. Which cost will fall by the lowest amount when the second unit is produced?
- Aaverage fixed cost
- Baverage total cost
- Caverage variable cost
- Dmarginal cost
As printed in the paper
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Correct answer: C. average variable cost
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