MC increases because
A) MC naturally increases as the firm nears capacity.
B) labor is paid overtime wages when volume increases.
C) in the short run, MC always increases.
D) the law of diminishing returns takes effect.
D
You might also like to view...
An example of a deficit item on the U.S. balance of payments is
A) the sale of a spark plug made by a U.S. firm in Michigan to a Nissan plant in Tennessee. B) the purchase of Japanese yen by a U.S. firm. C) a deposit in a bank in Chicago by the government of Saudi Arabia. D) the payment of a dividend by a British firm to a U.S. family.
A decrease in the price of the good on the horizontal axis rotates the budget constraint counterclockwise
a. True b. False Indicate whether the statement is true or false
Objective
What will be an ideal response?
Figure 4-15
Recycling of newspapers has been undermined by its success. The supply of old papers, gathered diligently by those concerned with the environment, has increased dramatically, as has the number of firms that convert the material into recycled newsprint. The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint. Consequently, the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind. Which graph in Figure 4-15 best illustrates this situation?
a.
1
b.
2
c.
3
d.
4