If the average productivity of the variable input increases, there will be a corresponding fall in average variable cost.

Question

Quizplus · Accepted Answer

When the average productivity of the variable input increases, it means that the same amount of inputs can produce more output, leading to economies of scale. This decrease in input costs spreads out over a larger number of units, resulting in a lower average variable cost.

If the Average Productivity of the Variable Input Increases, There