16) In the short-run cost analysis, when a firm’s marginal cost (MC) is unavailable, the best alternative of MC is its
| a) |
average total cost (ATC) |
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| b) |
average fixed cost (AFC) |
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| c) |
total variable cost (TVC) |
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| d) |
average variable cost (AVC) |
19) Which of the following is NOT a market characteristic for monopoly?
| a) |
One firm is the only supplier of a product. |
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| b) |
Entry into the market is blocked. |
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| c) |
The firm can influence market price though output decision-making. |
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| d) |
The firm’s product has few close substitutes. |
Ans:
16) Option D
average variable cost (AVC)
In the short run there are both variable and fixed cost.variable cost are cost that change with the output.marginal cost is the additional cost for producing the additional unit of output.If firm’s marginal cost (MC) is unavailable, the best alternative of MC is its average variable cost.
17) Option D
The firm’s product has few close substitutes.
Monopoly is a market structure characterized by one seller and large number of buyers.It is a price maker and it has no close substitutes.It is difficult for new firms to enter the industry.
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