Question: Why does the average variable cost decrease, reach a minimum, and then rise again, whereas the average fixed cost continues to decrease as output increases?

Why does the average variable cost decrease, reach a minimum, and then rise again, whereas the average fixed cost continues to decrease as output increases?

Step by Step Solution

★★★★★

3.41 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The average fixed cost continues to decline because ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1431-B-E-M-E(9005).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Use the total cost curve below to answer the following questions. a. For what values of output is marginal product of labor decreasing? What is true about marginal cost over this range of output? b....

Multiple Choice Questions: 1. Which of the following is always true? a. When marginal cost is less than average total cost, average total cost is increasing. b. When average fixed cost is falling,...

Suppose the market for T-shirts in the country of Argonia is perfectly competitive, and the price of a T-shirt is $20. A producer in this market has the following total cost and marginal cost...

Explain the investigation process As an HR manager, identify the first three steps you recommend the HR team take to begin to investigate this scenario. Explain how the steps you are recommending are...

Compounds A and B are isomers having the molecular formula C4H8O3. Identify A and B on the basis of their 1H NMR spectra. Compound A: 1.3 ppm (3H, triplet); 3.6 ppm (2H, quartet); 4.1 ppm (2H,...

Are the benefits and limitations of a canned presentation any different if it is supported with a PowerPoint presentation or DVD than if it is just a person talking? Why or why not?

5. Model motivation to learn for your students. Talk about your interest in the subject and how you deal with difficult learning tasks (Xu, Coats, & Davidson, 2012).

Currently, the unit selling price of a product is $280, the unit variable cost is $230, and the total fixed costs are $525,000. A proposal is being evaluated to increase the unit selling price to...

Project L costs $47,185.32, its expected cash inflows are $10,000 per year for 10 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places. % Project L costs...

Write a function to put 10 pixel wide prison cell bars on the left border, center, and right border of an input picture.

How many grams of oxygen are liberated by the electrolysis of water with a current of 0.0565 A after 1.85 104 s?

Can you help me answer this mathematical questions related to data management? Thank you so much!!! IS MMW Module 7 Post Task 2nd SE X _> Course Modules: Mathematics in X + X C A...

Instructions: 1. You must write the title of the case and the bibliographic record. 2. Mention the parties involved in the case, duly identified as plaintiffs or defendants, etc. 3. What is the main...

1.Two equal-sized newspapers have an overlap circulation of 10% (10% of the subscribers subscribe to both newspapers). Advertisers are willing to pay $8 to advertise in one newspaper but only $15 to...

Newells Decision to Downsize: An Ethical Dilemma A particular issue in business ethics is: What exactly does the term ethics mean? Various writers have described ethics as rules that govern behavior,...

5. DURATION OF INVERSE FLOATERS Assume that LIBOR rates are risk free. Suppose you have a 10 year note that pays a quarterly coupon of (10% - 2 3mo LIBOR), divided by 4 since this is a quarterly...

identify the components of effective collaboration

a. Determine the domain and range of the following functions.b. Graph each function using a graphing utility. Be sure to experiment with the window and orientation to give the best perspective of the...

From September 2007 through April 2008, the Fed believed that interest rates needed to fall and took steps to reduce them, eventually cutting the federal funds rate from 5.25 percent to 2.0 percent....

Explain why both business investments and purchases of new homes rise when interest rates decline.

Suppose there is $120 billion of cash and that half of this cash is held in bank vaults as required reserves (that is, banks hold no excess reserves). How large will the money supply be if the...

Cori's Meats is looking at a new sausage system with an installed cost of $475,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the...

On January 1, 2014, Wooden Company issued 16,000 shares of $2 par value common stock for $120,000. On March 1, 2014, the company purchased 2,000 shares of its common stock for $15 per share for the...

Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 1-9 Revenues Manufacturing Expenses (other than depreciation) Marketing Expenses Depreciation EBIT...

Related Book

Basic Economics 16th edition by Frank V. Mastrianna