Assume that the marginal cost of production is less than the average variable cost. Can you determine whether the average variable cost is increasing or decreasing? Explain. If the marginal cost of production is less than the average variable cost of production, then
Assume that the marginal cost of production is less than the average variable cost. Can you determine whether the average variable cost is increasing or decreasing? Explain. If the marginal cost of production is less than the average variable cost of production, then
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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![Assume that the marginal cost of production is less than the average variable cost. Can you determine whether the average variable cost is increasing or decreasing? Explain.
If the marginal cost of production is less than the average variable cost of production, then
O A. average variable cost is falling because the cost of the last unit produced is adding to total variable cost.
O B. average variable cost could be rising or falling because marginal cost and average variable cost are unrelated.
O C. average variable cost is falling because marginal cost and average variable cost are equal.
O D. average variable cost is rising because the cost of the last unit produced is adding more to total variable cost than previous units did on average.
O E. average variable cost is falling because the cost of the last unit produced is adding less to total variable cost than previous units did on average.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85bc5da6-eee5-4287-8a71-18810ce8fb0b%2F7c9407f6-78fb-4705-8039-9e69b8ab4285%2Foebz0t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume that the marginal cost of production is less than the average variable cost. Can you determine whether the average variable cost is increasing or decreasing? Explain.
If the marginal cost of production is less than the average variable cost of production, then
O A. average variable cost is falling because the cost of the last unit produced is adding to total variable cost.
O B. average variable cost could be rising or falling because marginal cost and average variable cost are unrelated.
O C. average variable cost is falling because marginal cost and average variable cost are equal.
O D. average variable cost is rising because the cost of the last unit produced is adding more to total variable cost than previous units did on average.
O E. average variable cost is falling because the cost of the last unit produced is adding less to total variable cost than previous units did on average.
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