Suppose That One Fixed and One Variable Input Are Used

question 41

Multiple Choice

Suppose that one fixed and one variable input are used to produce good X. As the marginal physical product of the variable input increases, the marginal cost

• A)increases.
• B)decreases.
• C)remains constant.
• D)There is not enough information to answer the question.

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Definitions:

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Standardization

The process of implementing and developing technical standards based on the consensus of different parties including firms, users, interest groups, standards organizations, and governments.

Cost Economies

Refers to the reduction in average cost of production as a firm increases its size or volume of output, typically achieved through operational efficiencies.

Product Variety

The assortment or mix of different products that a company offers to its customers.