Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?
a. As more of the variable factor is used, its price will rise.
b. When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.
c. As the variable factor is used more intensely, its marginal product will rise, causing an increase in marginal costs.
d. As the size of the firm increases, the operational efficiency of the firm declines, causing an increase in marginal costs.
b
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Explain the relationship between the real interest rate and investment demand. Compare that relationship to the relationship between expected profit and investment demand
What will be an ideal response?
The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run
a. True b. False Indicate whether the statement is true or false