Which of the following assumptions is made by economists while constructing a firm's marginal cost [MC] and average cost [AC] curves?
A)Input prices are constant.
B)Output is constant.
C)Output price is constant.
D)Technology will vary.

Question

Quizplus · Accepted Answer

Economists assume that input prices are constant while constructing a firm's MC and AC curves. This allows them to isolate the effect of changes in output on the cost of production, making it easier to analyze a firm's cost structure and make predictions about its behavior in different market conditions. However, it is worth noting that this assumption may not hold in reality, as input prices can vary depending on factors such as supply and demand, government policies, and natural disasters.

Which of the Following Assumptions Is Made by Economists While