Decent Donuts

-Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the AVC curve
A) has a negative slope.
B) has a positive slope.
C) is at its minimum point.
D) is at its maximum point.

Question

Decent Donuts
 
-Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the AVC curve
A) has a negative slope. 
B) has a positive slope. 
C) is at its minimum point. 
D) is at its maximum point.

Quizplus · Accepted Answer

The AVC (Average Variable Cost) curve typically has a positive slope when the production level is beyond the point of diminishing returns, meaning that additional units of labor contribute less to output, increasing the AVC.

Decent Donuts -Use the Data in the Table Above and Suppose That