Let y^*denote the level of output for which AP of a variable input reaches a maximum. Then: A)for y = y^*, short run SMC is zero. B)for y y^*, the input's SMP exceeds its AP. C)for y y^*, SMC exceeds AVC. D)for y

Question

Let y^*denote the level of output for which AP of a variable input reaches a maximum. Then: A)for y = y^*, short run SMC is zero. B)for y > y^*, the input's SMP exceeds its AP. C)for y > y^*, SMC exceeds AVC. D)for y < y^*, the input's AP exceeds its SMP.

Quizplus · Accepted Answer

In the short run, when output exceeds the level where average product (AP) is maximized, marginal cost (SMC) typically exceeds average variable cost (AVC) due to diminishing returns.

Let Y* denote the Level of Output for Which AP

Let Y^*denote the Level of Output for Which AP