When a firm produces an information product the initial or fixed costs are unpredictable high low or high low . Part 2 Consequently the average fixed cost and average total cost increase are constant change 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 average marginal 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 equal to below above 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 less than greater than the average cost