Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 7, Problem 11MC
To determine
Increasing average cost.
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Check out a sample textbook solutionStudents have asked these similar questions
If the marginal cost of production is greater than the average cost, in what direction must the average cost be changing if any?
A. The average cost must be rising.
B. The average cost would equal 0.
C. The average cost must be falling.
D. The average cost is unaffected.
E. The average cost would become non-existent.
When marginal cost exceeds average total cost,
a marginal cost must be rising.
b average total cost must be falling.
c average total cost must be rising.
d average fixed cost must be rising.
Which of the following is true of the relationship between Average Cost and Marginal Cost
Select one:
a. None of the answers given
b. Average increases when marginal cost decreases
c. Average costs decreases when marginal cost increases
d. Average costs increases when marginal cost increases
Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- Which of the following statement is correct? a. Marginal cost will equal average total cost when marginal cost is at its lowest point. b. When marginal cost is less than average total cost, average total cost will rise. C. When marginal cost is greater than average total cost, average total cost will fall. d. Marginal cost will equal average total cost when average total cost is at its lowest point.arrow_forwardTotal cost is equal to average cost times marginal cost. a. True b. Falsearrow_forwardThe government imposes a $1,000 per year license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.arrow_forward
- The government imposes a $1,000 one-time license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.arrow_forwardWhich type of cost does depend on a firm's output? 1.marginal cost 2.total cost 3.variable cost 4.all of the abovearrow_forwardIf the marginal cost is increasing does this tell you whether the average variable cost isincreasing or decreasing? Explain.arrow_forward
- find 5 problems related to variable cost, total cost, and marginal cost and Solve problems.arrow_forwardRefer to Figure: The vertical distance ABis Select one: A. total cost. B. marginal cost. C. total fixed cost D. average fixed cost.arrow_forwardCosts A. B. 80 120 160 180 200 Refer to the graph above to answer this question. What does point a represent? C. D. MC Economic capacity. Maximum marginal product. Excess capacity. AVC Maximum average product. ATCarrow_forward
- 1. Economies and Diseconomies of scale 2. Graph of marginal cost, average cost and average total cost. Take an example 3. Marginal cost, average variable cost, and average total cost. Take an examplearrow_forwardWhich of the following statements regarding marginal analysis is true? A. If total cost is falling, marginal cost must be positive. B. If total cost is rising, marginal cost must be rising. C. If total cost is rising, marginal cost could be falling. D. If total cost is falling, marginal cost could be zero.arrow_forwardMarginal cost, average total cost and average variable cost Marginal cost and average total cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal. b. Marginal cost and average variable cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal.arrow_forward
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