c. At this level of output, has this second firm started
experiencing diminishing average and marginal returns?
How do you know?
d. Is the firm operating below or above its capacity? How do
you know?
9. The cost curves for a firm producing a digital product such as an
app or an online course or an e-book are quite different than
those of a firm producing a physical product such as clothing or
food or furniture. Explain the difference in terms of marginal
costs.
