Intro to Short-Run Costs

Which of the following costs remains constant in the short run regardless of the level of output?

• Variable

• Total

• Fixed

• Marginal

Which of the following is the sum of average fixed and average variable costs?

• AFC

• AVC

• ATC

• MC

In the short run, if a firm produces one additional unit of output and its total cost increases, what is this increase called?

• Fixed cost

• Variable cost

• Average total cost

• Marginal cost

A firm's average fixed cost decreases as the level of output increases because:

• Variable costs decrease

• Fixed costs remain the same

• Total costs increase

• Marginal costs decrease

At a certain level of output, a firm's average variable cost is $10, and its average total cost is $15. What is the firm's average fixed cost at this level of output?

• $5

• $10

• $15

• $25

Draw an example of MC, ATC, and AVC that illustrate diminishing marginal returns.