Note AcademyNote Academy
Start

Economics (AS & A Level) · May / June 2026 · Paper 32 · Question 3

9708Types of cost, revenue and profit, short-run and long-run production

A firm is located in an industrial area of a city. The diagram shows the average total cost (ATC) curves for this firm. The firm is initially producing on ATC1 at an output of Q1. What is the most likely effect of improved transport infrastructure to this industrial area on the firm's average total costs?

  1. AIt falls to C2.
  2. BIt falls to C3.
  3. CIt falls to C4.
  4. DIt is unchanged at C1.

As printed in the paper

Show the answer

Correct answer: B. It falls to C3.

Sit this whole paper →More on Types of cost, revenue and profit, short-run and long-run production

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.