Say that a firm has fixed costs of $100 and constant average variable costs of $25. a.
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Say that a firm has fixed costs of $100 and constant average variable costs of $25.
a. Show AFC, VC, AVC, and MC in a table.
b. Graph the AFC, ATC, AVC, and MC curves.
c. Explain why the curves have the shapes they do.
d. What law is not operative for this firm?
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a b c AFC decreases with increased output because the fixed cost is allocated over an increasing num...View the full answer
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