The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.

-Refer to the information above to answer this question.As one reads down the AVC column,what is the pattern in the numbers?

Question

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 
-Refer to the information above to answer this question.As one reads down the AVC column,what is the pattern in the numbers?

Quizplus · Accepted Answer

The pattern described in E suggests that the Average Variable Cost (AVC) decreases as more units of labor are utilized up to a certain point (the fifth unit), indicating increasing efficiency or economies of scale. However, after remaining stable, the AVC increases with the addition of the seventh unit of labor, which could be due to diminishing returns, where adding more labor does not proportionally increase output and thus increases costs.

The Data in the Table Is for a Firm in Which