O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2021 · Q131 Mark

The diagram shows the total cost curve for a firm. [Figure 13.1] What can be concluded about the firm?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

AIt has no fixed costs.

BIt has no variable costs.

CIts average fixed cost increases.

DIts average variable cost is constant.

✓ Correct answer

D: Its average variable cost is constant.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2021 Paper 1 Variant 2, question 13.

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