If the marginal cost curve is U-shaped,

Question

BlackTom AI · Accepted Answer

When the marginal cost curve is U-shaped, it reflects the typical production process where initially increasing marginal productivity (due to specialization and gains from division of labor) lowers marginal costs, but after a point, diminishing marginal returns cause marginal costs to rise.

Option a: 'the average variable cost curve is a straight line.' This is incorrect because AVC usually declines initially as output rises (due to increasing marginal returns) and then rises as diminishing returns set in, giving AVC a U-shaped pattern rather than a straight line.

Option b: 'the average total cost curve is continually upward sloping.' This is not generally true for a typical U-shaped MC. In the short run, ATC is also U-shaped because it includes AFC, which is always falling, and the AVC portion that is U-shaped. Therefore ATC is not continually upward sloping.

Option c: 'average fixed costs are continually decreasing.' While AFC does decline as output increases, it is not a statement about the MC shape, and it does not capture the behavior of MC. This option describes AFC, not the implications of a U-shaped marginal cost curve.

Option d: 'there are productivity gains from specialization before diminishing marginal product sets in.' This aligns with the standard explanation of a U-shaped MC: initial specialization and learning reduce marginal costs, but after a point, diminishing marginal returns push costs back up. This option correctly describes the early downward-sloping portion of MC before the later upward-turn due to diminishing returns.

In summary, the other options mischaracterize typical cost curves or focus on components (AVC, ATC, AFC) rather than the implications of a U-shaped marginal cost curve related to specialization and diminishing returns.

THC - MCD2020 - T3 - 2025 Homework Quiz 6 - Cost of Production

If the marginal cost curve is U-shaped,

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THC - MCD2020 - T3 - 2025 Homework Quiz 6 - Cost of Production

If the marginal cost curve is U-shaped,

查看解析

登录即可查看完整答案

类似问题

If a firm's average total cost decreases as the firm increases its output, the firm's marginal cost must be

When the average total cost curve is at its minimum, we know that the

In the short run, ATC curve and AVC curve converge as output increases because

When the average variable cost curve is upward sloping, the marginal cost curve:

When the average variable cost curve is upward sloping, the marginal cost curve:

In the diagram, A represents a firm's _____ curve, B represents its _____ curve, and C represents its _____ curve.

If a new tax on capital increases a firm’s fixed cost of production, which of the following will occur in the short run?

更多留学生实用工具

希望你的学习变得更简单

In the diagram, A represents a firm's ___ curve, B represents its _ curve, and C represents its ___ curve.