1. Suppose that the only input used in the generation of solar energy is sunlight, which has a zero cost. The average total cost of producing electricity is:

a. zero.
b. equal to the marginal cost.
c. equal to the average fixed cost.
d. immeasurably high.

2. When a firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is _________ and the firm is experiencing___________.

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