The law of diminishing marginal returns
A. results in average variable cost (AVC), average total cost (ATC), and marginal cost (MC) curves eventually increasing at an increasing rate.
B. causes average fixed costs to decline continuously as output increases.
C. causes the difference between average total cost and average variable cost to shrink as output increases.
D. results in MC but not ATC curves eventually increasing at an increasing rate.
Answer: A
You might also like to view...
A production subsidy combined with free trade
A) has the same deadweight costs as a tariff. B) has only consumption deadweight costs. C) has only production deadweight costs. D) None of the above.
Employers verify the facts of potential employees' resumes to avoid
A) signaling. B) screening. C) cheap talk. D) moral hazard.
Refer to the table below. If Sweet Grams is a perfectly competitive firm and the market price $1.75 per unit, what is the profit-maximizing quantity for Sweet Grams to produce at Plant 2?
Sweet Grams makes graham cracker snack packages. Sweet Grams is a multi-plant firm with two production facilities. The above table summarizes the total marginal cost of production at various output levels in the separate plants. Assume Sweet Grams is a perfectly competitive firm.
A) 32,000
B) 36,000
C) 32,500
D) 27,000
If Nike and Adidas are faced with the game in the figure shown, we can predict:
A. an outcome that is good for society and less than ideal for the companies.
B. an outcome that is less than ideal for society, but optimal for the companies.
C. that both will follow their dominant strategy and society will lose.
D. None of these is likely to happen.