O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2018 · Q141 Mark

A firm that sells its product for $6 a unit has the following total costs. Which statement is correct?

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AAverage cost is lowest when 10 units are produced.

BThe firm does not make any profit when 20 units are sold.

CThe firm has no fixed costs.

DTotal variable costs fall continuously over these outputs.

✓ Correct answer

B: The firm does not make any profit 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 2018 Paper 1 Variant 1, question 14.

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