Asked by
Heather Barring
on Oct 25, 2024
Verified
Consider the following statements when answering this question I. If a firm employs only one variable factor of production, labor, and the marginal product of labor is constant, then the marginal costs of production are constant too.
II) If a firm employs only one variable factor of production, labor, and the marginal product of labor is constant, then short-run average total costs cannot rise as output rises.
A) I is true, and II is false.
B) I is false, and II is true.
C) I and II are both true.
D) I and II are both false.
Marginal Product
The extra output generated from increasing a particular input by one unit while all other inputs remain unchanged.
Marginal Costs
The increase in total cost that arises from producing one additional unit of output, a key factor in determining optimal production quantities.
Short-Run Average Total Costs
The total production costs divided by the quantity produced when at least one input is fixed, typically analyzed in the short-run period.
- Evaluate the influence of the law of diminishing returns on production function and cost considerations during the short run.
Verified Answer
EB
Learning Objectives
- Evaluate the influence of the law of diminishing returns on production function and cost considerations during the short run.