If marginal product is below average product .
Fall
Rise
Constant
Slowly rise
If law of diminishing return is in operation average cost
Decreases
Increases
Remains constant
Decreases slowly
In the short term a firm will produce provided the revenue
Covers fixed costs
Covers variable costs
Covers total costs
Covers sales
The profit per sale is a measure of
Cash flow
Profitability
Feasibility
Liquidity
_______ 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.
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
The average variable cost curve
Is derived from the average fixed costs
Converges with the average cost as output increases
Equals the total costs divided by the output
Equals revenue minus profits
If marginal revenue equals marginal costs .
No profit is being made .
Total revenue equals total cost.
Profits are maximised .
Producing another unit would increase profit .
Economic profit is the difference between total revenue and
Average cost
Marginal cost
Economic cost
