When XYZ Corporation produces 35 units of output its average variable cost is $5 . The marginal cost of the 36th unit of output is $7 . If the firm chooses to produce the 36th unit of output, what will happen to average variable cost? Explain
What will be an ideal response?
If the firm decides to produce the 36th unit of output, its average variable cost will rise because the marginal cost is greater than the average variable cost.
Economics
You might also like to view...
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Economics
Table 7.1 exemplifies the principle of
A) diminishing returns. B) marginal costs. C) full employment equilibrium. D) real vs. nominal costs.
Economics