Advances in managerial knowledge shift the production function:
A) And the marginal cost curve upward.
B) And the average total cost curve downward.
C) Upward and the average total cost curve downward.
D) Downward and the marginal cost curve upward.

Question

Quizplus · Accepted Answer

Advances in managerial knowledge can make production more efficient, shifting the production function upward as more output is produced for any given input. This efficiency also typically results in lower average total costs, as the firm can spread its fixed costs over a larger output and may also find ways to reduce variable costs.

Advances in Managerial Knowledge Shift the Production Function