Costs that are "fixed": a. do not vary in the short run, but can change in the long run. b. will never change. c. vary with output, but not with resource prices. d. are better predictors of profit than variable costs.

What are diseconomies of​ scale? Diseconomies of scale is   A. when the marginal product of labor is decreasing with output.   B. when the marginal cost of production is increasingwith output.   C. when a​ firm's long-run average costs decrease with output.   D. when a​ firm's long-run average costs increase with output.

4. COST RELATIONSHIPS. A firm's total costs can be broken down into fixed costs (e.g., rent) and variable costs (e.g., payroll), so TC = FC + VC. Dividing by quantity converts these to averages, so TC/Q = FC/Q + VC/Q, or ATC = AFC + AVC. The additional cost incurred by producing one additional unit is the marginal cost, so MC = ATC/AQ, where the Greek letter delta (A) means "a change in." Here is a table showing the various costs for a simple firm that sells a product using a building (capital, a fixed input) and workers (labor, a variable input). Assume that the price of labor is 20 and the price of capital is 120. Use these three cost relationships to complete the table. Total Total Average Variable Cost, Сapital, Output, Q Labor, Total Average Fixed Average Total Cost, Marginal Cost, MC Variable K Fixed Cost, TC Cost, Cost, TFC Cost, TVC AVC AFC АТС 1 120 N/A N/A N/A N/A 1 2 1 160 3 1 20 3 6. 1 40

Average total cost is very high when a small amount of output is produced because Select one: a. average fixed cost is high. b. average variable cost is high. O c. marginal product is high. d. marginal cost is high.