Question 15 The short-run supply curve to a firm operating under perfect competition is most accurately...

Question 15
The short-run supply curve to a firm operating under perfect competition is most accurately described as the segment of the:
A. marginal cost (MC) curve above the average variable cost (AVC) curve.
B. marginal cost (MC) curve below the average total cost (ATC) curve.
C. average total cost (ATC) curve above the average variable cost (AVC) curve.
D. marginal cost (MC) curve.

question 17

Which of the following factors of production is least likely to be fixed in the short run?
A. Labour.
B. Plant size.
C. Technology.
D. Loans.

Question 21
Based on the concept of diminishing returns, as the quantity of output increases, the short-run marginal costs of production eventually:
A. rise at a decreasing rate.
B. rise at an increasing rate.
C. fall at a decreasing rate.
D. fall at an increasing rate

Expert Solution

Answer : 15) The answer is option A.

Under perfect competition the firm's supply curve is the part of marginal cost curve which lies above AVC. Therefore, option A is correct.

17) The answer is option A.

Generally in short-run the labor is a variable factor of production. Hence labor is a least likely fixed factor of production in short run. Therefore, option A is correct.

21) The answer is option B.

According to diminishing returns, if output increase then the marginal cost increase at increasing rate. Therefore, option B is correct.

Rahul Sunny answered 2 years ago

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