Scenario 13-17
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-17.Average total cost will be

Question

Quizplus · Accepted Answer

The average total cost curve is typically U-shaped because initially, as more workers are added, the average total cost decreases due to spreading fixed costs over more units. However, as the marginal product of labor decreases, the average total cost eventually starts to rise.

Scenario 13-17 Suppose That a Given Firm Experiences Decreasing Marginal Product of Product