If both the marginal cost and the average variable cost curves are U-shaped, which of the following is true over the range of output for which the average variable cost curve has a negative slope?
a. The marginal cost curve must have a negative slope
b. The average total cost curve must have a negative slope.
c. The marginal cost curve is below the average variable cost curve.
d. both (b) and (c) are correct.
d
You might also like to view...
What is the government's major problem involved in reaching the optimal level of provision for public goods?
What will be an ideal response?
Suppose you are risk averse and you are deciding between two investments. One has a guaranteed return of 5% while the second has a 50% chance of a 10% return and a 50% chance of a 0% return. Which investment would you choose? Why?
What will be an ideal response?
Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Assume the economy is currently at Point A on aggregate supply curve AS1. An increase in inflationary expectations that causes firms to increase their prices
A. moves the economy to Point B on aggregate supply curve AS1. B. moves the economy to Point C on aggregate supply curve AS1. C. shifts the aggregate supply curve to AS0. D. shifts the aggregate supply curve to AS2.
If the bidders at an oral auction have true values of $8, $7, $6, and $5, the item will sell for
a. $8 b. $7 c. just over $7 d. just under $7