O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2021 · Q141 Mark

The table shows the average total cost of a firm over a range of output. output (units) average total cost ($) 1 10 2 8 3 6 4 5 5 7 6 9 What happens after 4 units are produced?

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AThe firm experiences management problems.

BThe firm gains the benefits of merging with another firm.

CThe firm pays lower interest rates to banks.

DThe firm receives significant discounts from bulk buying.

✓ Correct answer

A: The firm experiences management problems.

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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 14.

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