Homework Answers
Average cost (AC) curve represents the total costs per unit of output. Average Variable Cost (AVC) curve represents the total variable costs per unit of output. Marginal Cost (MC) curve shows the addition to total costs due to production of one more unit of output. All the 3 curves are U-shaped i.e. they first decrease, reach a minimum point and then starts increasing with increase in output.
The relationship between all the 3 curves is shown below:
As it can be seen in above figure, when MC is below AVC, both the AC and AVC are decreasing. So, the correct answer is (D).
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If marginal cost is below average variable cost OA) average variable cost is less than average...
Marginal cost is _____________ average variable cost when _________________. Group of answer choices a) greater than;...
Marginal cost is _____________ average variable cost when _________________. Group of answer choices a) greater than; average fixed cost is minimized. b) equal to; average total cost is minimized c) less than; total cost is maximized d) equal to; average variable cost is minimized
If average variable cost is falling with increasing output, then a.marginal cost must be less than...
If average variable cost is falling with increasing output, then a.marginal cost must be less than average variable cost. b.marginal cost must be greater than average variable cost. c.average fixed cost is rising. d.marginal cost must be rising. e,marginal cost must be falling.
15. When marginal cost is less than average total cost, a. marginal cost must be falling....
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
19. Table 13-16 Quantity Total Cost Fixed Cost Variable Cost Marginal Cost Average Fixed Cost Average Variable Aver...
19. Table 13-16 Quantity Total Cost Fixed Cost Variable Cost Marginal Cost Average Fixed Cost Average Variable Average Total Cost 0 $24 $16 $50 $108 Refer to Table 13-16. What is the fixed cost of producing units of output? a. $16 b. $24 C. $12 d. $0 20. Refer to Table 13-16 in Question 19. What is the total cost of producing 2 units of output? a $76 b. $74 C. $58 d. $50 21. Refer to Table 13-16 in...
Questions 1- 10 refer to the short-run total and variable cost curves shown in Figure 1...
Questions 1- 10 refer to the short-run total and variable cost curves shown in Figure 1 Figure 1 1. In Figure 1, at output 0B, line segment HK equals A. average fixed cost. B. fixed cost. C. average total cost. D. marginal cost. E. total cost. NC 2. According to Figure 1, the marginal cost curve cuts the average total cost curve at output 3. Average total cost is minimized in Figure 1when output equals 4. Marginal cost is minimized...
6) If the average variable cost of producing 10 units is $18 and the average variable...
6) If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output, A) marginal cost is increasing. B) average total cost is increasing. C) average fixed cost is increasing. D) total cost is either increasing or decreasing. E) none of the above Use the figure below to answer the following questions. Price (dollars per inhaler) 10 7 4. 2...
In the short run, average total cost is less than average variable cost. sometimes higher and...
In the short run, average total cost is less than average variable cost. sometimes higher and sometimes lower than average variable cost. higher than average variable cost. equal to average variable cost. QUESTION 4 1 pc If, in the short run, the level of output is zero, which of the following statement is TRUE? Total variable cost is zero but total cost equals total fixed cost, and both of the latter exceed zero. Total cost and total fixed cost graphs...
price is less than the average variable cost and the marginal cost must be falling O...
price is less than the average variable cost and the marginal cost must be falling O marginal cost is greater than marginal revenue. All this is contingent upon the conditions that the price is less than the average total cost and the marginal cost must be falling D Question 12 5 pts The demand curve of a typical firm in monopolistic competition is: O upward-sloping and less-elastic (steeper) than a perfectly competitive firm's demand curve. O downward-sloping and less-elastic than...
When marginal cost of production falls below the average total cost of production, we know that:...
When marginal cost of production falls below the average total cost of production, we know that: A. marginal cost is negative B. average total cost is decreasing C. the firm has diseconomies of scale D. average total cost is increasing
6. Total cost is calculated as a.the sum of total fixed cost and total variable cost....
6. Total cost is calculated as a.the sum of total fixed cost and total variable cost. b.the product of average total cost and price. c. the sum of all the firm's explicit costs. d. the sum of average fixed cost and average variable cost 7. The formula for the total fixed cost is a.TFC = TC + TVC. b.TFC = TVC -TC c.. TFC = TC/TVC. d.TFC = TC -TVC 8.The Lawn Ranger, a landscaping company, has total costs of...
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
19. Table 13-16 Quantity Total Cost Fixed Cost Variable Cost Marginal Cost Average Fixed Cost Average Variable Average Total Cost 0 $24 $16 $50 $108 Refer to Table 13-16. What is the fixed cost of producing units of output? a. $16 b. $24 C. $12 d. $0 20. Refer to Table 13-16 in Question 19. What is the total cost of producing 2 units of output? a $76 b. $74 C. $58 d. $50 21. Refer to Table 13-16 in...
Questions 1- 10 refer to the short-run total and variable cost curves shown in Figure 1 Figure 1 1. In Figure 1, at output 0B, line segment HK equals A. average fixed cost. B. fixed cost. C. average total cost. D. marginal cost. E. total cost. NC 2. According to Figure 1, the marginal cost curve cuts the average total cost curve at output 3. Average total cost is minimized in Figure 1when output equals 4. Marginal cost is minimized...
6) If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output, A) marginal cost is increasing. B) average total cost is increasing. C) average fixed cost is increasing. D) total cost is either increasing or decreasing. E) none of the above Use the figure below to answer the following questions. Price (dollars per inhaler) 10 7 4. 2...
In the short run, average total cost is less than average variable cost. sometimes higher and sometimes lower than average variable cost. higher than average variable cost. equal to average variable cost. QUESTION 4 1 pc If, in the short run, the level of output is zero, which of the following statement is TRUE? Total variable cost is zero but total cost equals total fixed cost, and both of the latter exceed zero. Total cost and total fixed cost graphs...
price is less than the average variable cost and the marginal cost must be falling O marginal cost is greater than marginal revenue. All this is contingent upon the conditions that the price is less than the average total cost and the marginal cost must be falling D Question 12 5 pts The demand curve of a typical firm in monopolistic competition is: O upward-sloping and less-elastic (steeper) than a perfectly competitive firm's demand curve. O downward-sloping and less-elastic than...
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