If the marginal cost is above the average cost at a certain level of production and the firm decides to increase output, then: a. The average cost will increase but the marginal cost will decrease. b. Both the average and the marginal cost will increase. c. The average cost will increase but the average cost will decrease. d. Both the average and the marginal cost will decrease.
If the marginal cost is above the average cost at a certain level of production and the firm decides to increase output, then: a. The average cost will increase but the marginal cost will decrease. b. Both the average and the marginal cost will increase. c. The average cost will increase but the average cost will decrease. d. Both the average and the marginal cost will decrease.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: The Cost Of Production
Section: Chapter Questions
Problem 1PA
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Question
If the marginal cost is above the average cost at a certain level of production and the firm
decides to increase output, then:
a. The average cost will increase but the marginal cost will decrease.
b. Both the average and the marginal cost will increase.
c. The average cost will increase but the average cost will decrease.
d. Both the average and the marginal cost will decrease.
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