1-If marginal cost is below average total cost, average total cost will
-be maximized.
-decrease.
-increase.
-remain constant.
2-A firm's marginal cost curve above its AVC is also its short-run supply curve.
- True
- False
3- A firm ________ if it earns zero economic profit.
-earns a negative rate of return.
-will leave the industry.
-earns a positive but below normal rate of return.
-earns exactly a normal rate of return.