Which of the following statements is true ?
A) When marginal cost is below average cost, average cost rises; when marginal cost is above average cost, average cost falls.
B) The marginal product is the output per unit of a variable input.
C) Average variable cost and average fixed cost are U-shaped curves.
D) When marginal productivity of a variable input is falling then marginal costs of production must be rising.

Question

Quizplus · Accepted Answer

When the marginal productivity of a variable input decreases, it means that each additional unit of input produces less output than the previous unit. This leads to an increase in the cost of producing each additional unit of output, hence, marginal costs of production rise.

Which of the Following Statements Is True