If marginal cost is less than average cost, average cost must fall when more units are produced.   Is this true?

Q: How and why does a firm’s average-total cost curve differ in the short run compared with the long…

A: In the long run, a firm adjusts the different factors of production that are fixed in comparison in…

Q: Why the average cost curve is a U shaped curve?

A: # The total cost per unit of output is reffered to be as the average costs.

Q: What are the average total cost, average variable cost, average fixed cost, and marginal cost of…

A: Q=4 TC=140 TFC=50 ∆TC=140-110         =30 ∆Q =4-3       =1

Q: If marginal physical product is continually declining, what does marginal cost look like?

A: The marginal physical product is the additional output which can be produced by the firm by…

Q: Why is the Average Total Cost curve U-shaped?

A: The average cost (AC) or average total cost (ATC) is the cost per unit of production. The average…

Q: What effect, if any, does diminishing marginal product have on the shape of the marginal cost curve?

A: According to the law of diminishing marginal returns, after a certain level adding additional units…

Q: Explain how input, output and cost are interrelated

A: A business needs to make use of inputs for turning them into outputs that could finally be sold in…

Q: What is the difference between sunk cost and fixed cost? Explain with examples.

A: Sunk costs and fixed costs are two kinds of expenses borne by a corporation in the different…

Q: What explains why the long run average cost curve is u-shaped

A: First of all average cost fall in the beginning because the factor of production or the capital used…

Q: Give a numerical example to show that as marginal physical product (MPP) rises, marginal cost (MC)…

A: Marginal Physical Product (MPP) is the addition to the total physical product when an additional…

Q: Describe marginal cost in your own words.

A: Cost accounting is a method of financial management that examines a business's variable and fixed…

Q: What explains the shape of the average and marginal cost curves?  Is it linked to any production…

A: Marginal cost is the measurement of change in total cost with the increment of quantity produced by…

Q: Diminishing Marginal Returns” is achieved when?

A: The law of diminishing marginal returns states that adding an extra factor of production ends up in…

Q: Which expression is another way of saying "marginal cost"?                Scarce resources…

A: Marginal cost is the increment in total cost for producing additional units of a commodity. It is…

Q: Define Fixed Cost and provide an example.

A: A company's fixed expenses are critical. Profit forecasting and calculating the break-even point are…

Q: Show me how to arrive at Average Variable Cost?

A: Total variable cost varies with the level of production.

Q: Why is having a business objective of increased economies of scale always desirable?

A: Economies of Scale in the Business World When it comes to economies of scale, the size of the…

Q: What happens to marginal cost if a business's average total cost is decreasing? Marginal cost must…

A: Marginal cost (MC) is the change in total cost when one more unit of a good is produced.Average…

Q: Define total cost, average total cost, and marginal cost.  How are they related?

A: Total Cost (TC) is the cost of production of a good and it includes both the variable cost i.e. the…

Q: What will happen to the average total cost if the average variable cost is falling? a. Rises B.…

A: The average Total cost if the the average variable cost is falling is also falling.

Q: Why is the average cost a U shape

A: Cost refers to the amount of money required to produce the goods and services by the various factors…

Q: You are told that the marginal cost of production is increasing. Is it possible to determine whether…

A: Marginal cost of production refers to the additional cost of producing one extra unit of output,…

Q: Marginal cost is ?

A: Microeconomics deals with the several components of a single firm or an individual. The subject’s…

Q: The reason why the average total cost curve is u shaped is because

A: ‘Total cost(TC)’ is the amount that includes all the expenses that are paid to produce a certain…

Q: What are economies of scale? Give an example. What are the diseconomies of scale? Give an example

A: Economics is a branch of social science that deals with the production, consumption, and…

Q: If the marginal cost equals average cost, we are at the _____ point of the ____ curve.

A: Marginal cost is that cost which is incurred because of producing one additional unit of the output,…

Q: What is the relation between fixed cost and total cost ??

A: Fixed cost is the cost that is to occur on the fixed expenses whether there is production or not.…

Q: Explain the relationship between the average cost and the marginal cost?

A:

Q: If the marginal cost of production is greater than the average cost, in what direction must the…

A: If marginal cost is higher than average cost it means the slope of average cost will be higher than…

Q: What is the relationship between marginal product and marginal cost? Why do you suppose that is? Is…

A: Marginal Product: The term marginal product refers to the increase in total product due to the use…

Q: Discuss about the concept of marginal cost using your own example?

A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…

Q: How does fixed cost affect marginal cost? Why is this relationship important?

A: Fixed cost is the cost which does not change with the change in the output. Marginal cost is the…

Q: Is fixed cost always smaller than total cost ?

A: The question talks about the two terms i.e., fixed cost and total cost.

Q: How do we calculate each of the following: marginal cost, average total cost, and average variable…

A: The total cost(TC)  is the production cost incurred on engaging various inputs i.e land, capital,…