With a given plant size, an increase in output will NOT result in an increase in

Question

With a given plant size, an increase in output will NOT result in an increase in,
a. average variable cost
b.total cost
c.total fixed cost
d.average fixed costis

The change in total variable cost which accompanies one extra unit of output
a.marginal cost
b.the average variable cost
c.the average total cost
d.the average fixed cost

When total product is rising,
a. variable cost must be declining
b. marginal cost must be postive
c. marginal product must be negative
d. fixed cost must be rising

For a perfectly competitive firm,
a. price is less than marginal revenue
b.there is no relationship between price and marginal revenue
c. price is greater than marginal revenue
d.price equals marginal revenue

Explanation / Answer

With a given plant size, an increase in output will NOT result in an increase in,
a. average variable cost : will increase
b.total cost :will increase

c.total fixed cost
d.average fixed costis : will decrease

As the plant size is constant, the fixed cost component will not increase or decrease with changes in output.


The change in total variable cost which accompanies one extra unit of output

a.marginal cost : MC is the change in total cost with an additional unit of output, as the fixed cost component is constant we can also define it as change in variable cost with an additional unit of output.

b.the average variable cost
c.the average total cost
d.the average fixed cost

When total product is rising,
a. variable cost must be declining
b. marginal cost must be postive
c. marginal product must be negative
d. fixed cost must be rising

For a perfectly competitive firm,
a. price is less than marginal revenue
b.there is no relationship between price and marginal revenue
c. price is greater than marginal revenue
d.price equals marginal revenue

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