1/ Suppose a firm has very high FC and low MC. Which is true about the firm's average costs? multiple choices

a. ATC will probably fall as Q increases.

b. VC will be relatively high

c. AFC will be constant.

2/ Suppose ATC stays the same as the firm produces more output. What does this tell us about MC? multiple choices

a. MC must be equal to ATC

b. MC must be increasing

c. Nothing - the two are not related

d. MC must be lower than ATC