Question

An important relationship between production and cost can be represented by which of the following statements

a.

when average or marginal products are increasing, average or marginal costs are decreasing

b.

when average or marginal products are increasing, average or marginal costs are increasing

c.

when average or marginal products are decreasing, average or marginal costs are decreasing

d.

there is no relationship between production and cost​

Answer 1

Answer:

Concept:

With increase in production, the costs first decrease then start increasing after the optimum level of production.

Solution:

The correct answer is (a).