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WAEC Economics 2023 Question 19

Question 19

Theory of Costs and Revenue

If a firm retrenches some of its factory workers, its

  1. A.fixed cost is likely to increase.
  2. B.marginal cost may increase.
  3. C.average fixed cost may increase.
  4. D.variable cost will decline.
Show the answer and explanation

Answer: D (variable cost will decline.)

Explanation

Wages of production workers are variable costs.