A firm spends $400 to produce 20 units of output and spends $880 to produce 40

units of output. Which statement is true?

(A)

The firms average cost curve lies above it

s

marginal cost curve

somewhere

between Q = 20

and Q = 40

.

(B)

The firms average cost curve lies below its marginal cost curve

somewhere between Q = 20 and Q = 40.

(C)

The firms average cost and marginal cost curves cross between Q = 20

and

Q

= 40

.

(D)

none of the above statements is true