Answer the following questions true (T) or false (F)
1. If marginal product is equal to average product, then total product is at a maximum.
2. If marginal cost is above the average variable cost, then average variable cost is decreasing.
3. If the marginal product of labor is decreasing, then marginal cost of production must be rising.
1. FALSE
2. FALSE
3. TRUE
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The marginal social cost of a good or service is the cost borne by the producer
Indicate whether the statement is true or false
If a firm is earning short-run economic profits shown in the above figure, in the long run
A) firms exit the industry, the market supply curve shifts rightward, and the market price falls. B) firms enter the industry, the market supply curve shifts rightward, and the market price falls. C) firms exit the industry, the market supply curve shifts leftward, and the market price falls. D) firms enter the industry, the market supply curve shifts rightward, and the market price rises.