As Production of Food Increases, Marginal Benefit from Food

question 146

Multiple Choice

As production of food increases, marginal benefit from food

• A)increases and marginal cost increases.
• B)increases and marginal cost decreases.
• C)decreases and marginal cost increases.
• D)decreases and marginal cost decreases.
• E)decreases and marginal cost is zero.

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Definitions:

Marginal Costs

The cost associated with producing one extra unit of a commodity, emphasizing the importance of scale in production.

Average Total Costs

The total cost of production divided by the number of units produced, representing the cost per unit.

Average Fixed Costs

Fixed production costs (unchanged by output volume) divided by the total produced output quantity.

Short-Run

A period in which at least one factor of production is fixed, influencing how businesses can respond to changes in demand or supply.