Average Fixed Cost (AFC): Total fixed cost (TFC) divided…

  Average Fixed Cost (AFC): Total fixed cost (TFC) divided by quantity of output  Average Variable Cost (AVC): Total variable cost (TVC) divided by quantity of output Average Total Cost (ATC): Total cost (TC) divided by quantity of output MC indicates marginal cost.  Based on the above plots, (1)_____________ continuously declines as the quantity of output rises, because (2)____________ is constant. 

Armen Alchian and Harold Demsetz suggest that firms are form…

Armen Alchian and Harold Demsetz suggest that firms are formed when the benefits that can be gained from working as a team are less than the sum of the benefits that could be gained by acting individually. (1)________________(Ture/False) According to Ronald Coase, firms exist to reduce transaction costs.  (2)_____________(Ture/False)