As output increases, a typical firm's unit costs
a. decrease because the firm buys its inputs in large quantities
b. increase because the supply of inputs increases
c. remain constant
d. increase due to the increasing scarcity of resources
e. decrease as firms take advantage of diseconomies of scale
D
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The isoquants for inputs that are perfect complements for one another consist of a series of:
a. right angles b. parallel lines c. concentric circles d. right triangles e. none of the above
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.