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    Exam 7: The Cost of Production
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    If a Factory Has a Short-Run Capacity Constraint (E
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If a Factory Has a Short-Run Capacity Constraint (E

Question 80

Question 80

Multiple Choice

If a factory has a short-run capacity constraint (e.g., an auto plant can only produce 800 cars per day at maximum capacity) , the marginal cost of production becomes ________ at the capacity constraint.


A) infinite
B) zero
C) highly elastic
D) less than the average variable cost

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