If average variable costs fall as output grows:

Related MCQs

• With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is:
• If you know that with 8 units of output, average fixed cost is Rs. 12.50 and average variable cost is Rs. 81.25, then total cost at this output level is:
• Marginal costs and average variable costs are equal when
• If the short-run average variable costs of production for a firm are rising, then this indicates that:
• Which of the following statements best describes the general form of a production function: (i) It is a purely technological relationship between quantities of input and quantities of output. (ii) It represents the technology of an organisation, sector of an economy. (iii) Prices of inputs or of the output do not enter into the production function. (iv) It is a flow concept describing the transformation of inputs into output per unitof time.
• Suppose that a firm produces 200,000 units a year and sells them all for Rs.10 each. The explicit costs of production are Rs.1,500,000 and the implicit costs of production are Rs. 300,000. The firm has an accounting profit of:
• The average total costs of the firm as defined in standard economic theory
• Variable costs are:
• When both average and total product are greater than zero, and marginal product equals average product, then total product:
• A fall in the price of the commodity holding everything else constant results in: