MCQ

QUESTION 25

The short term ATC curve is "U"shaped because;

1. total costs always increase as output,or production increases
2. as output increases,both the AFC and the AVC increase
3. as output increases,both the AVC and the AFC decrease
4. in the short term,allocating FC over more units of output tends to lower per unit costs while diminishing returns will at some point increase per unit costs
5. none of the above, the short run ATC is not "U" shaped

1 points

QUESTION 26

Lets say that two of Canada's largest gas retailers wanted to merge and become one entity.The expected consequence of this would be;

1. a higher concentration ratio and less price competition between suppliers
2. a higher concentration ratio and increased price competition between suppliers
3. a lower concentrationratio therefore more choices for consumers
4. none of the above; knowledge of concentration ratio's does not help us predict business startegies