Which of the following cost curve is never 'U' shaped? A. Average cost curve B. Marginal cost curve C. Average variable cost curve D. Average fixed cost curve
Question
Which of the following cost curve is never 'U' shaped? A. Average cost curve B. Marginal cost curve C. Average variable cost curve D. Average fixed cost curve
Solution
The correct answer is D. Average Fixed Cost curve.
Here's why:
A. Average Cost Curve: This curve is U-shaped because it decreases at first due to economies of scale, and then increases due to diseconomies of scale.
B. Marginal Cost Curve: This curve is also U-shaped. It decreases with an increase in output due to increasing returns to scale, and then increases due to diminishing returns to scale.
C. Average Variable Cost Curve: This curve is U-shaped for the same reasons as the average cost curve.
D. Average Fixed Cost Curve: This curve is always downward sloping and never U-shaped. This is because fixed costs do not change with the level of output, so the average fixed cost decreases continuously as output increases.
Similar Questions
If both the marginal and the average variable cost curves are U-shaped, at the point of minimum average variable cost the marginal cost must be ........... Question 1Select one:a.rising. b.equal to the average variable cost.c.falling.d.at its minimum.
30.The shape of the average fixed cost curve is: A. U' shape B. Horizontal C. Vertical D. Rectangular hyperbola
Choose all answers that are correct: the marginal cost is the slope of theGroup of answer choicesThe variable cost curveThe marginal product curveThe average product curveThe total cost curveThe average cost curve
The average fixed cost curve:Multiple choice question.decreases for all levels of output.increases for low levels of output, then begins to decrease as output increases.increases for all levels of output.decreases for low levels of output, then begins to increase as output increases.
For quantities occurring before the marginal cost curve and average total cost curve intersect, the average total cost curve will be:Multiple choice question.decreasing.negative.increasing.at its minimum.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.