firm aims at minimizing its cost. Which of the following statement is TI A. The firm's technology must exhibit decreasing returns-to-scale. B. The average production cost of the firm must increase as y increases. C. The average production cost function may be concave. D. Suppose the firm becomes subject to the short-run constraint that x2 = run total cost curve is always higher than the original long-run total cosi

firm aims at minimizing its cost. Which of the following statement is TI A. The firm's technology must exhibit decreasing returns-to-scale. B. The average production cost of the firm must increase as y increases. C. The average production cost function may be concave. D. Suppose the firm becomes subject to the short-run constraint that x2 = run total cost curve is always higher than the original long-run total cosi

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter22: Supply: The Costs Of Doing Business

Section: Chapter Questions

Problem 10E

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Question

2. Suppose a perfectly competitive firm's production function is y = f(x1, x2). The
firm aims at minimizing its cost. Which of the following statement is TRUE?
A. The firm's technology must exhibit decreasing returns-to-scale.
B. The average production cost of the firm must increase as y increases.
C. The average production cost function may be concave.
D. Suppose the firm becomes subject to the short-run constraint that x, = x2. The short-
run total cost curve is always higher than the original long-run total cost curve.

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