Suppose a firm with the usual U- shaped cost curves is producing a level of output such that its short- run costs are as follows: ATC = $0.37 per unit AVC = $0.32 per unit AFC = $0.05 per unit MC = $0.43 per unit
Given these short- run costs,as the firm increases its output,which of the following statements is true?
A) Average product of the variable factor must be increasing.
B) Marginal product of the variable factor is at its minimum point.
C) Marginal product of the variable factor must be increasing.
D) Marginal product of the variable factor must be decreasing.
E) The point of diminishing average product of the variable factor has not yet been reached.
Correct Answer:
Verified
Q2: The relationship between factors of production used
Q3: The opportunity cost of money that a
Q4: In economics,the term "fixed costs" means
A)implicit costs.
B)costs
Q5: The table below provides the total
Q7: Diminishing marginal product of labour is said
Q8: A firm's short- run marginal cost curve
Q9: The diagram below shows some short- run
Q10: If a firm uses factor inputs that
Q11: The following data show the total
Q66: The following data show the total output
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents