3.3.2 Costs

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Question 1
Medium

The graph below shows the short-run average total cost (ATC) curve for a craft micro-brewery.

Short-run average total cost (ATC) curve for a craft micro-brewery

At output levels greater than Q∗Q^*Q∗, which one of the following correctly identifies what will happen to the average fixed cost, average variable cost, and marginal cost?

Average fixed cost: Falls, Average variable cost: Falls, Marginal cost: Rises

Average fixed cost: Falls, Average variable cost: Rises, Marginal cost: Rises

Average fixed cost: Rises, Average variable cost: Rises, Marginal cost: Falls

Average fixed cost: Rises, Average variable cost: Falls, Marginal cost: Falls

3.3.2 Costs Questions

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