If average cost is above marginal cost, average cost must be falling.
Answer the following statement true (T) or false (F)
True
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Assume the firms firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the kinked demand curve model this would:
A) cause a large change in the profit-maximizing level of output. B) leave the equilibrium price unchanged. C) cause the profit-maximizing level of output to change by the same amount and in the same direction. D) cause the profit-maximizing price to change by the same amount but in the opposite direction.
While the country of New Zafariland specializes in dairy products, its geographical neighbor, Zwansea specializes in heavy machinery. New Zafariland exports dairy to Zwansea, which in turn exports heavy machinery to New Zafariland. According to the theory of comparative advantage, this mutually beneficial trade relationship best illustrates
A. A zero-sum game. B. The significance of trade barriers C. A positive-sum game
Suppose the central bank implements a monetary contraction that is fully expected by financial market participants. Given this information, we would expect
A) stock prices to rise. B) stock prices to fall. C) stock prices to remain unchanged. D) an ambiguous effect on stock prices. E) stock prices to fall and the interest rate to rise.
In the above table, what is the marginal factor cost of the 5th worker?
A) $22 B) $18 C) $90 D) $26