Asked by Lauren Stacy on Jul 12, 2024
Verified
In the short run,as output gets larger:
A) fixed cost gets smaller.
B) the average variable cost curve gets closer to the average total cost curve.
C) marginal cost gets smaller.
D) average total cost decreases after the point of diminishing returns.
Diminishing Returns
A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.
Average Variable Cost
The total variable cost divided by the quantity of output produced, representing the average cost of production excluding fixed costs.
Average Total Cost
The sum of all production costs divided by the quantity of output produced, representing the cost per unit of output including both fixed and variable costs.
- Ascertain the contexts in which average variable and total costs grow or decline.
Verified Answer
Learning Objectives
- Ascertain the contexts in which average variable and total costs grow or decline.
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