Figure 1 BFigure 2

Multiple Choice

Figure 1
b.
Figure 2
c.
Figure 3
d.
Figure 4
ANSWER:
d
DIFFICULTY:
Moderate
LEARNING OBJECTIVES:
ECON.MANK.174 - Given a graph of the production function and input costs, derive the firm's total-cost curve.
TOPICS:
Producer theory
Production function
KEYWORDS:
BLOOM'S: Comprehension
CUSTOM ID:
178.13.3 - MC - MANK08
Figure 13-8
-Refer to Figure 13-8. Which of the following statements is correct?

A) Average total cost is rising for quantities higher than D because marginal cost is higher than average total cost.
B) Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost.
C) Average variable cost is minimized at B because at that quantity, marginal cost equals average variable cost.
D) All of the above are correct.