Scenario 13-20
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-20. Average fixed cost will be
A)rising at all points.
B)falling at all points.
C)U-shaped.
D)constant.

Question

Quizplus · Accepted Answer

Average fixed cost falls as output increases because fixed costs are spread over a larger number of units, regardless of the marginal product of labor.

Scenario 13-20 Suppose That a Given Firm Experiences Decreasing Marginal Product of Product