Production Functions a and B Result in the Same Average

question 42

Multiple Choice

Production functions A and B result in the same average total costs of production.However,production function A is twice as capital intensive as production function B.In this case,all else constant:

• A)marginal costs will be higher in A than they are in B.
• B)marginal costs will be higher in B than they will in A.
• C)because total costs are equal, marginal costs will be equal for the two production functions as well.
• D)there is no way to say anything about the relative marginal costs of production in the two production functions without additional information.

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