When the marginal cost is lesser than the average cost the firm is producing in which Answers: A. The average cost is decreasing. B. The total cost is decreasing. C. The average cost is increasing. D. The marginal cost is decreasing.

When the marginal cost is lesser than the average cost the firm is producing in which Answers: A. The average cost is decreasing. B. The total cost is decreasing. C. The average cost is increasing. D. The marginal cost is decreasing.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

See similar textbooks

Related questions

Q: Table showing Total Cost and Quantity of Output Quantity of Total Average Total Marginal Cost Output…

A: Average total cost of the total cost per unit of output. Marginal cost is the change in total cost…

Q: Quantity Average Fixed Cost Average Total Cost 1 140 2 75 3 60 4 55 5 54 6 20 60 Short run…

A: Diminishing returns to production starts where marginal cost increases with an increase in output,…

Q: rease in the short run ease in the short run

A: Cash balance refers to the part of income that people want to hold as cash in hand.

Q: Marginal cost intersects average total cost at minimum average total cost. True False

A: The price curve always intersects the typical total cost curve at its lowest point because the…

Q: Which of the following profits represent economic profit? Choose all that apply. a. A restaurant…

A: Accounting profit is the net income for a company, which is revenue minus explicit costs(out of the…

Q: Draw the short-run average total cost (ATC), average variable cost (AVC), and marginal cost (MC)…

A: Average total Cost is the total cost per unit of output. Average Variable Cost is the variable cost…

Q: See the cost information in the table below. The marginal cost of the 6th unit is Quantity…

A: The marginal cost of a good refers to the increment in the total cost when an additional unit of a…

Q: Question : Imagine a small juice shop that only fresh fruit juice. i) Discuss the concept of…

A: i) Discuss the concept of marginal cost and average total cost using the given situation. Answer:…

Q: Use the following information to answer the question Quantity (number ofFixedVariable Total Marginal…

A: Marginal cost is the cost which occurs due to the production of one more unit of output is called…

Q: Workers Output Marginal product Total costs ATC MC 1 20 2 50 90 120 5 140 6. 150 7 155 1. Fill in…

A: Since you posted a question with multiple sub-parts, we will solve first three sub-parts for you. To…

Q: (d) Evaluate the following statement. "I used my own money, my own land and my own equipment to…

A: The opportunity cost of a particular activity option in microeconomic theory is the loss of value or…

Q: a. Graph marginal cost (MC). Instructions: Use the MC' tool to draw the marginal cost curve point by…

A: A competitive firm maximizes profit by producing that quantity of output where marginal cost equals…

Q: Refer to Figure: The vertical distance ABis Select one: A. total cost. B. marginal cost. C. total…

A: Curve 1 is the Marginal Cost(MC) Curve Curve 2 is the Average Variable Cost(AVC) Curve Curve 3 is…

Q: 6)ABC company is using labor and capital to build widgets The last employee produced 20 more widgets…

A: 6. The marginal product of labour = 20 The price of labour = $10 The marginal product of…

Q: Fill in the blank and explain the choice of correct answer. When the marginal…

A: The markets are the place where the buyers of various goods and services and the sellers, or the…

Q: 1) In the following market, Marginal Product Marginal cost Workers Output Total Cost Average Total…

A: marginal product = change in total product/change in labor TFC is independent of output produced…

Q: QUESTION 4 (Theory of Production and Cost) a. Define and illustrate Total, Marginal and Average…

A: Since you have posted multiple questions, we are answering the first one for you. If you want a…

Q: e) In the following diagram of cost curves, how many short runs have been created? State and explain…

A: Average short run curve: It refers to the curve which is a U shaped curve. It decreases the average…

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: 9) A chocolate company makes truffles using labor and capital. The company pays the workers $12 per…

A: The problem of reducing costs is, in mathematics, a problem. In limited optimization. The firm wants…

Q: Chapter 11 Production and Costs – Units of Total Marginal Product Total Variable ATC AVC MC Labor…

A: The law of diminishing marginal return that when more and more variables factors are added with…

Q: Discuss the relationship between the three short-run total cost curves. Use a diagram to motivate…

A: Short run is the time period in microeconomics wherein some inputs are fixed while other inputs are…

Q: 8) EFG Company is using labor and capital to build phones. The last employee produced 90 more phones…

A: The marginal product for a factor of production refers to the addition in output as a result of…

Q: c. When output is 3, average variable cost is $ d. When output is 4, average total cost is $ e. When…

A: Total cost(TC) consists of fixed cost(FC) and variable cost(VC) Fixed cost is the one that doesn't…

Q: Draw the marginal-cost and average-total-cost curves for a typical firm. Explain why the curves have…

A: Marginal cost: Marginal expense is the adjustment in the all-out cost that emerges when the amount…

Q: BONUS: Explain precisely why in the short run the Marginal Cost curve intersects the Average Cost…

A: Minimal cost (MC) is the additional expense brought about when an additional one unit of output is…

Q: What is the difference between accounting profit and economic profit? Select one: a. Accounting…

A: Firms earn revenue with the help of the sale of the products that it produces. On the other hand, it…

Q: 4. If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100 worth…

A: Accounting profit is the difference between total revenues and explicit costs where explicit costs…

Q: You are thinking about setting up a lemonade bar. The bar itself costs € 200 a week to rent. The…

A: Total cost of production is the total expenditure incurred by the firms on the factors of production…

Q: 29. Vanable costs: aDo not exist in the long run. b. Are the only costs that exist in the long run.…

A: Costs incurred on fixed factors that cannot be altered in the short run are called Fixed Costs. They…

Q: 3. Marginal cost a. Is below average total cost in the range where average total cost is rising b.…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: When marginal cost equals average variable cost, average variable costiv (Click for List) falling…

A: Average variable cost is per unit variable cost on the other marginal cost is an additional cost…

Q: a. Compute the average cost and marginal cost. Units of output Total Cost Average Cost Marginal Cost…

Q: When marginal cost equals average toal cost, average total cost, (Click for List) rising at a…

A: Marginal cost is change in total cost divided by change in output. Average cost is the cost per unit…

Q: (d) Find the minimum average production cost per unit and the level of production that minimizes…

A: Average cost(AC) is defined as total cost(TC) divided by the total units produced. Here, units are…

Q: Quantity Total Cost Marginal Cost Using Total Cost (Dollars) Variable Cost Marginal Cost Using…

A: The firm produces the goods and services with the inputs of production using labor and capital. The…

Q: Find the attached file.

A: Long run cost is the cost where there are no fixed factors of production. In short run, some factors…

Q: a) What is marginal cost? b) What is average variable cost? c) How much output is being produced?

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: A cost that changes with the level of production is called a(n)____cost a.variable b.average total…

A: Ans. The cost is the expenditures that are incurred during the production of the goods and services.…

Q: statements is true or false and explain If marginal cost is larger than average cost, average cost…

A: Marginal cost is the additional cost incurred in order to produce an additional unit of output.

Q: Which of the following is an implicit cost? A. The $100,000 the firms pay a person in salary to…

A: Since you have posted multiple questions, so as per answering guideline, We are bounded to solve…

Q: This chapter discusses many types of costs:opportunity cost, total cost, fixed cost, variable…

A: Cost is the expense incurred when a good or service is produced.

Q: Explain the production in short run?

A: Microeconomics studies the economic behavior of individual units such as a consumer, a producer, a…

Q: 8. Which one of the following cost can never become zero? (A) (B) (C) (D) Average cost Fixed cost…

A: Answer according to the given question Option(B) is correct that it is the fixed cost which cannot…

Q: Explain the idea behind diminishing marginal returns and give a real-life example.

A: Diminishing Marginal Returns happen while expanding one unit of creation, while holding different…

Question

When the marginal cost is lesser than the average cost the firm is producing in which


Answers:	A. The average cost is decreasing.
	B. The total cost is decreasing.
	C. The average cost is increasing.
	D. The marginal cost is decreasing.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Average total cost, average variable cost marginal cost and marginal product b. The relationship between marginal product and marginal cost is reciprocal or opposite. Why is it so? Explain.
In the short run marginal cost crosses average total cost at the minimum of average total cost True or False?
You own a company that produces widgets. You currently produce 100 widgets; each widget sells for $100 and costs $80 to produce. At this production level, what are your total costs? A. TC = $80 B. TC = $8,000 C. TC = $20 D. TC = $2,000
Marginal analysis (a.k.a. thinking at the margin) Multiple selects assumes dimishing marginal returns does not allow for hypothetical questions considers unit changes implies that MR=MC allows for negative marginal returns
Mention and explain the cost components certainly do not exist in the long run?
Asap Total cost can be divided into two types. What are those two types? Select one: a. fixed costs and average costs b. fixed costs and variable costs c. average costs and marginal costs d. fixed costs and marginal costs
Average total cost, average variable cost marginal cost and marginal product a. Why is the gap or difference between average total cost and average variable cost larger at initial level of production ction and then the gap is decreasing as output increases? Explain.
Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the marginal cost and average total cost intercept? Explain the relationship between the marginal cost and the average total cost with the help of graph.
A. Graph total fixed cost, total variable cost and total cost B. Explain how the law of diminishing returns influences the shapes of the total variable-cost and total costbcurves
Question : Imagine a small juice shop that only fresh fruit juice.i) Discuss the concept of marginal cost and average total cost using the given situation.ii) Discuss the law of diminishing marginal returns using the given situation.Note: (Please answer all but no need to draw any tables and diagrams in your answers)
a. Give 2 examples of explicit cost b. Give 2 examples of implicit cost/opportunity cost/cost of ownership/cost of equity capital c. Imagine yourself as an entrepreneur. Pick any business you like. Run some numbers to calculate your accounting profit and economic profit. Show your numbers. Note: Make up those numbers yourself. d. After you have run the numbers, do you still want to start the business? Why or why not?
Q: A farmer plane to harvest maize on his specific land. Discuss all factors of production whichhe need to harvest the whole season of crop. Also mentioned their rewards. Differentiate between economic profit and accounting profit, implicit explicit cost, total cost, variable cost, & average cost?