A rising marginal cost curve is a reflection of a
1 point
rising marginal physical product curve.
falling marginal physical product curve.
falling average fixed cost curve.
rising average variable cost curve.
As the marginal physical product of a variable input __________, the marginal cost __________.
1 point
increases; increases
increases; decreases
decreases; increases
b and c
Which of the following statements is true?
1 point
If the marginal cost curve is above the AFC curve, the AFC curve must be rising.
Average total cost equals average variable cost minus average fixed cost.
As output increases, the average variable cost curve gets closer to the average total cost curve.
The AFC curve is horizontal as output increases.
Answers
Explanation:
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Answer : A rising marginal cost curve is a reflection of a falling marginal physical product curve.
As the marginal physical product of a variable input increases, the marginal cost decreases.
True statement - As output increases, the average variable cost curve gets closer to the average total cost curve.
Explanation :
- A rising marginal cost curve is a reflection of a falling marginal physical product curve.
Marginal cost curve : The marginal cost curve is the graphical representation of marginal cost (also referred to as incremental cost) as the number of units of production increases. As it presents the cost of increasing one more unit of output at a range of different output rates, the incremental cost curve is essential for calculating efficiency in a company. Rather than acting as a simple metric, the incremental cost curve is a highly informative graph demonstrating an advisable strategy for economists, management and accountants alike.
Marginal product curve :
Marginal product curve is downward sloping because as production increases mp curve goes on increasing but afterwards falls or becomes u-shaped.
- As the marginal physical product of a variable input increases, the marginal cost decreases.
When the marginal product increases does the marginal cost decrease?
In economics, marginal cost represents the total cost to produce one additional unit of product or output. Marginal product is the extra output generated by one additional unit of input, such as an additional worker. Marginal cost and marginal product are inversely related to one another: as one increases, the other will automatically decrease proportionally and vice versa.
The relationship between marginal cost and marginal product can be attributed to the law of diminishing returns, a central concept in the field of economics. This law states that, as one continues to add resources or inputs to production, the cost per unit will first decline, then bottom out, and finally start to rise again. For example, a company may add a new worker to its manufacturing operations. This new employee helps the firm increase its total output and may also increase marginal product. After too many workers have been added, however, employees may find themselves wasting time waiting to use tools and equipment, or simply crowding one another out, resulting in a higher marginal cost.
Due to the inverse relationship between marginal cost and product, marginal product will always be at its maximum level just as marginal cost reaches its minimum point. The opposite is also true, where marginal product is at its minimum level as marginal cost reaches the maximum level. Graphically, the two are illustrated as mirror images to one another. When marginal product is at the highest possible level and marginal cost is at its lowest point, diminishing returns begin to set in, and marginal cost will begin to rise.
- As output increases, the average variable cost curve gets closer to the average total cost curve.
The average variable cost (AVC) is calculated by dividing the firm’s variable costs by the output or quantity that has been produced. The average total cost, on the other hand, is calculated by dividing the total cost by the output or quantity of goods that have been produced.
It is important to note that the total cost of a firm is a combination of both variable costs (labor and electricity) and fixed costs (buildings and equipment). Variable costs increase proportionally to the number of items produced, while the fixed costs are spread among the items as production increases.
At the start of production, fixed costs are higher than the variable costs but as production increases the variable costs increase. Thus, as quantity increases, both the variable costs and, consequently, the total costs will continue to increase. The situation forces the ATC and AVC curves to move closer to each other as the quantity continues to increase.
The shape of the average variable cost curve is U-shaped.
Average total cost (ATC) is calculated by dividing total cost by the total quantity produced. The average total cost curve is typically U-shaped. Average variable cost (AVC) is calculated by dividing variable cost by the quantity produced.
To know more about the concept please go through the links :
https://brainly.in/question/14343723
https://brainly.in/question/14658342
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