Because the Marginal Product of a Variable Resource at First

question 377

Multiple Choice

Because the marginal product of a variable resource at first increases and then decreases as the output of the firm is increased,

• A)total cost at first increases at a decreasing rate and then increases at an increasing rate.
• B)total variable cost at first increases at an increasing rate and then increases at a decreasing rate.
• C)average total cost at first increases and then diminishes.
• D)average fixed cost will rise beyond the point of diminishing returns.

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Definitions:

Natural Resources

Natural resources, including minerals, forests, water, and arable land, are elements found in the environment that can be exploited for financial benefit.

Price Change

An adjustment in the cost of a good or service.

Natural Resources

Raw materials and environmental assets that are found in nature and can be used for economic gain.

Elasticity of Demand

Estimating how much the demand for a product fluctuates in response to changes in its price.