true or false. please explain why The AC curve is U-shaped because of the declining AFC and the effects of thediminishing marginal product at higher levels of production.

The average cost is the per-unit cost that is equal to the total cost divided by the number of units…

Answered: The AC curve is U-shaped because of the…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 7WNG

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Similar questions

Justify the statement. T/F Variable cost change with the change in the level of output in a production process.
Under what conditions do the following production functions exhibit decreasing, constant, or increasing returns to scale? a) q=L+K b) q=LaKb c) q= L+ LaKb + K
What is the slope of an iso-cost line equal to and why? Provide mathematical explanation
At zero level of production, _______ cost is always zero
When the ATC curve is falling, MC is ATC. less than greater than equal to
Discuss the main feature behind the long run average cost curve in terms of usage of input.
Use the concepts of economies and diseconomies of scale to explain the shape of a firm’s long-run ATC curve. What is the concept of minimum effificient scale? What bearing can the shape of the long-run ATC curve have on the structure of an industry?
Suppose that Jump A Lot Inc. can produce 12 trampolines a day for a total cost of $1,840. If technology and input prices remain the same and total cost increases to $3,680, what must be the new quantity of output per day under conditions of a) constant returns to scale (Click to select) b) economies of scale (Click to select) c) diseconomies of scale ✓ (Click to select) output increases to more than 24 output increases to less than 24 output increases to 24
A company has the following cost functions in the short run, where the production level, Q , is measured in ‘000s of units:TC = 0.5Q^3 − 2Q^2 + 5QFC = 7(i) Calculate the optimum output level for this company in the short run.(ii) Calculate the marginal cost for this company at a production level of 3000 units
Under what conditions do the following production functions exhibit decreasing, constant, or increasing returns to scale. q = L + K q = L + LaKb + K
Suppose you are production manager of a manufacturing company. Specify the name of your company (your choice) and describe what happens to total product and marginal product as you keep increasing one input (labor) keeping other factors constant. Hint: Consider the short run law of production and behavior of TP and MP in 3 stages of production.
Which of the following statements is right? The marginal cost curve is the inverse shape of the marginal product curve. The marginal cost increases as the marginal product increases. The marginal cost curve intersects the ATC curve at its highest point. When the marginal cost of producing another unit is less than the ATC curve, producing an extra unit increases the ATC.

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The AC curve is U-shaped because of the declining AFC and the effects of the diminishing marginal product at higher levels of production.