content area Part 1 When a firm produces an information product the initial or fixed costs are low or high low high unpredictable . Part 2 Consequently the average fixed cost and average total cost increase decrease are constant change as the volume of output increases. Part 3 Since most of the costs are the initial fixed costs of development, once the product is developed, the total marginal average cost of producing more units of the product are typically low and constant increasing decreasing . Part 4 In this case, then, the low and constant marginal cost is equal to above below the average cost. Part 5 If the firm set the price, or average revenue, of the product equal to the marginal cost, the firm would have economic profits normal profits economic losses Part 6 since the marginal cost is equal to less than greater than the average cost