Answer to Question #220790 in Microeconomics for Ujjwal

Question

Question 1: By re-stating the firm’s supply decision, we have the following:

Select one:

a. if at the best production level ‘q*’ greater than the average variable cost, then the firm should choose to produce ‘q*’

b. if at the best production level ‘q*’ greater than the average fixed cost, then the firm should choose to produce ‘q*’

c. if at the best production level ‘q*’ less than the average variable cost, then the firm should choose to produce ‘q*’

d. if at the best production level ‘q*’ greater than the marginal cost, then the firm should choose to produce ‘q*’

Answer 1

By re- stating the firm's supply decision:

(d) if at the best production level q* greater than the marginal cost, then the firm should choose to produce q*.