HELP!!!!!!! Which of the following statements is true for such a firm?

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veeraxox
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Attachment 693404Attachment 693398

A) total costs are minimised at output K
B) total costs are falling between J and K
C) Total costs are minimised at output L
D) The distance between H and I is the firm's average variable costs
E) Total costs are rising between J and K

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monkeyman0121
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veeraxox
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(Original post by monkeyman0121)
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monkeyman0121
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What does ac and mc stand for. I think it is C, because they have both connected and this is the minimum cost for them both to output the same amount.
Hopefully someone else will reinforce what I have said or give you the right answer d:
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Speckle
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(Original post by veeraxox)

A) total costs are minimised at output K
B) total costs are falling between J and K
C) Total costs are minimised at output L
D) The distance between H and I is the firm's average variable costs
E) Total costs are rising between J and K
I'd say E.

I'm assuming you have copied out the possible answers correctly...

A) False. Total costs are minimised at output = 0.
B) False. Marginal costs are positive, therefore total costs are rising.
C) False. Total costs are minimised at output = 0.
D) False. Average variable cost is the difference between average (total) cost and average fixed costs. Average fixed costs are not the same as marginal costs.
E) True. Marginal costs are positive, therefore total costs are rising.
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