6. A firm\'s supply curve is equal to its marginal cost curve in the short-run.

Question

6. A firm's supply curve is equal to its marginal cost curve in the short-run. A. This is true across all quantities B. This is true depending on the average fixed cost curve C. This is true where the marginal cost curve sits above the average variable cost curve his is true where the marginal cost curve sits above the average total cost curve D. T 7. A firm supplies nothing when the price is below a dollar. It has a straight- lined supply curve that conforms to the law of supply. Price elasticity of supply iswhile as the slope of the supply curve is_ A. constant, constant B. negative, constant C. constant, negative D. positive, constant

Explanation / Answer

Answer

6 (C)

reason rising part of marginal cost is related to supply curve which lies above the Average variable cost.

7(D)

price elasticity of supply is positive as there is positive relation ship between price and quantity supply and slope is constatn as it is upward sloping. left to right.

1(C)

PPC will shift immediately due to technological development where we can produce more consumer and capital goods.

2 (D)

reason this principle is similar to law of diminishing return as here we consider that if firm is already working on full capacity than further allocation of resources to it will decrease the opportunity of producing further as fixed factor has exhausted and variable factor have nothing to do with it.

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