Explain the relationship between marginal cost and average variable cost
What will be an ideal response?
If MC is less than AVC, then AVC is decreasing. If MC is greater than AVC, then AVC is increasing. If MC = AVC, then AVC is minimized.
You might also like to view...
The discretionary change of government expenditures or taxes to achieve national economic goals is
A) a direct expenditure upset. B) fiscal policy. C) Ricardian-equivalence theorem. D) supply-side economics.
If the government wishes to encourage firms to internalize externalities, they should ________ activities resulting in negative externalities and ________ activities resulting in positive externalities
A. place an injunction against; tax B. tax; subsidize C. subsidize; tax D. ban; generate
A credit market instrument that provides the borrower with an amount of funds that must be repaid at the maturity date along with an interest payment is known as a
A) simple loan. B) fixed-payment loan. C) coupon bond. D) discount bond.
In the ________, one firm sets its output first, and then a second firm, after observing the first firm's output, makes its output decision
A) Cournot model B) model of monopolistic competition C) Bertrand model D) kinked-demand model E) none of the above