When a firm produces an information product the initial or fixed costs are high unpredictable low low or high . Part 2 Consequently the average fixed cost and average total cost change increase are constant decrease 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 decreasing constant increasing . Part 4 In this case, then, the low and constant marginal cost is above below equal to 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 economic losses normal profits Part 6 since the marginal cost is equal to greater than less than the average cost