According to the law of diminishing returns
The marginal product eventually falls as more units of a variable factor are added to a fixed factor
Marginal utility falls as more units of a product are consumed
The total product falls as more units of a variable factor are added to a fixed factor
The marginal product eventually increases as more units of a variable factor are added to a fixed factor
If the marginal revenue is less than the marginal cost then to profit maximize a firm should
Reduce output
Increase output
Leave output where it is
Increase costs
If marginal product is below average product .
Fall
Rise
Constant
Slowly rise
When internal economics of scale occur
Total costs falls
Marginal cost increase
Average costs fall
Revenue fall
In the short term a firm will produce provided the revenue
Covers fixed costs
Covers variable costs
Covers total costs
Covers sales
_______ increases and decreases with the volume of output .
Fixed cost
Variable cost
Total cost
Money cost
Which one of the following statement is true ?
If the marginal cost is greater than the average cost the average cost falls
If the marginal cost is greater than the average cost the average cost increases.
If the marginal cost is positive total costs are maximised.
If the marginal cost is negative total costs increase at a decreasing rate if output increases.
If the firms earn normal profits
They will aim to leave the industry
Other firms will join the industry
The total revenue equals total costs
No profits is made in accounting terms
_______ cannot be changed in the short period .
Production cost
Variable cost.
The profit per sale is a measure of
Cash flow
Profitability
Feasibility
Liquidity
