Suppose a Given Marginal Cost Curve Starts Out Downward Sloping

question 44

Multiple Choice

Suppose a given marginal cost curve starts out downward sloping and at some level of output turns upward and becomes upward sloping. The point at which it turns upward is the point at which

• A)marginal physical product increases.
• B)total cost rises.
• C)average fixed cost declines.
• D)average variable cost is below marginal cost.
• E)diminishing marginal returns set in.

---

Definitions:

Profit Maximizing

The strategy or method of adapting manufacturing and sales processes to secure the maximum achievable profit.

Firm Interest

The commercial or financial concerns and objectives of a business organization.

Socially Optimal

A condition or level of operation where social welfare is maximized, considering all costs and benefits to society.

Marginal Cost

The rise in total expenses incurred from the production of an extra unit of a product or service.