Graph typical total, average, and marginal cost curves and explain how their shapes are influenced by the law of diminishing returns. Graph TC on a separate graph, AC and MC on a second graph
TC rises slowly at first and then more quickly once diminishing returns set in (Figure 7-19). Marginal cost, which is the slope of total cost, will be positive but decreasing initially; it will increase at the point of diminishing returns. Average cost will fall at first but eventually will increase. The point of increase is at a larger level of output than the point of diminishing returns. Average cost continues to decline beyond the point of diminishing returns because, at least for a while, declining average fixed cost reduces AC by more than diminishing returns increase AC.
Figure 7-19
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A) an increase in supply. B) a decrease in the quantity supplied. C) an increase in the quantity supplied. D) a decrease in supply.
Which of the following benefits is counted as income when the official poverty rate is calculated?
a. Medicaid benefits b. food stamps c. public housing benefits d. none of the above e. all of the above