Consider the following statements when answering this question I. If a firm employs only one variable factor of production, labor, and the marginal product of labor is constant, then the marginal costs of production are constant too.
II) If a firm employs only one variable factor of production, labor, and the marginal product of labor is constant, then short-run average total costs cannot rise as output rises.
A) I is true, and II is false.
B) I is false, and II is true.
C) I and II are both true.
D) I and II are both false.

Question

Quizplus · Accepted Answer

Both statements are true. In the short run, if one variable factor is being used, and the marginal product of labor is constant, then the marginal cost of production will also be constant. Additionally, if the marginal product of labor is constant, then short-run average total costs cannot rise as output rises.

Consider the Following Statements When Answering This Question I