O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2010 · Q221 Mark

A firm which sells its product for $6 has the following total costs. Which statement is correct? [Figure 22]

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AAverage cost is lowest when 10 units are produced.

BThe firm breaks even when 20 units are sold.

CThe firm has no fixed costs.

DTotal variable costs fall continuously over these outputs.

✓ Correct answer

B: The firm breaks even when 20 units are sold.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2010 Paper 1 Variant 1, question 22.

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