What is the relationship between the marginal cost curve and marginal product? Explain
What will be an ideal response?
The short-run cost curve is a reflection of the law of diminishing marginal product. Graphically, the marginal cost curve looks like the inverse of marginal physical product of a variable input. As long as marginal product rises, marginal costs decline. At the point at which marginal product begins to decline, marginal costs begin to rise.
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Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement
A) from the region within the PPF to a point on the PPF. B) from the region within the PPF to the region outside of the PPF. C) from the region outside of the PPF to a point on the PPF. D) along the PPF where to gain more of one good it is necessary to give some of another good.
Advertising costs are ________ costs and the per unit cost of advertising ________ as production increases
A) fixed; increases B) variable; increases C) fixed; decreases D) variable; does not change