Which one of the following statements is false? The vertical gap between curves B and C is equal to average fixed cost The vertical gap between curves B and C is equal to average variable cost Curve D represents marginal cost Average fixed cost decreases with output. C Which one of the following statements is false? Cost (£) 150 100 50 50 A 5 10 15 Output (trousers per day) The vertical gap between curves B and C is equal to average fixed cost The vertical gap between curves B and C is equal to average variable cost Curve D represents marginal cost Average fixed cost decreases with output.

Which one of the following statements is false? The vertical gap between curves B and C is equal to average fixed cost The vertical gap between curves B and C is equal to average variable cost Curve D represents marginal cost Average fixed cost decreases with output. C Which one of the following statements is false? Cost (£) 150 100 50 50 A 5 10 15 Output (trousers per day) The vertical gap between curves B and C is equal to average fixed cost The vertical gap between curves B and C is equal to average variable cost Curve D represents marginal cost Average fixed cost decreases with output.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 33CTQ: Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then...

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Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost, variable costs, and marginal cost?
How does fixed cost affect marginal cost? Why is this relationship important?
What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?
How do we calculate each of the following: marginal cost, average total cost, and average variable cost?
Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?