Figure 12-3
-Refer to Figure 12-3.The graph illustrates a typical total cost curve.Based on its shape,what does the corresponding production function look like?
A) an upward-sloping curve that increases at an increasing rate
B) an upward-sloping curve that increases at a decreasing rate
C) a downward-sloping curve
D) a horizontal straight line

Question

Figure 12-3 
-Refer to Figure 12-3.The graph illustrates a typical total cost curve.Based on its shape,what does the corresponding production function look like?
A) an upward-sloping curve that increases at an increasing rate 
B) an upward-sloping curve that increases at a decreasing rate 
C) a downward-sloping curve 
D) a horizontal straight line

Quizplus · Accepted Answer

The total cost curve is upward-sloping, but it increases at a decreasing rate, which implies that the corresponding production function exhibits diminishing marginal returns. As more units of inputs are added, the increase in output becomes smaller, leading to a flatter total cost curve.

Figure 12-3 -Refer to Figure 12-3.The Graph Illustrates a Typical Total Cost