Why do average variable costs eventually rise if a company's output increases enough?O Diminishing marginal product occurs, causing average variable costs to rise.The diminishing marginal revenue triggers increased use of resources.O The reduction in average fixed costs must be offset by increasing variable costs.O The price paid for each unit of input keeps rising.

Costs refer to the expenses that firms incur to purchase raw materials and the factors of production…

Why do average variable costs eventually rise if a company's output increases enough? O Diminishing marginal product occurs, causing average variable costs to rise. O The diminishing marginal revenue triggers increased use of resources. O The reduction in average fixed costs must be offset by increasing variable costs. The price paid for each unit of input keeps rising.

Why do average variable costs eventually rise if a company's output increases enough? O Diminishing marginal product occurs, causing average variable costs to rise. O The diminishing marginal revenue triggers increased use of resources. O The reduction in average fixed costs must be offset by increasing variable costs. The price paid for each unit of input keeps rising.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

See similar textbooks

Similar questions

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
What is the difference between a fixed input and a variable input?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
How does fixed cost affect marginal cost? Why is this relationship important?