Question

In long run equilibrium for a perfectly competitive firm; the firm will produce where

• A. Marginal cost is at a minimum
• B. Average fixed cost is at a minimum
• C. Average variable cost is at a minimum
• D. Average total cost is at a minimum

Height of a marginal product product curve shows:

A. the additional cost of producing one more unit of a good

• B. the additional production from producing one more unit of the good.
• C. the additional production from hiring one more unit of the variable input
• D. the additional average product from hiring one more unit of the variable inpu
  t

Answer 1

1.

D. Average total cost is at a minimum

Explanation :

In long run, perfectly competitive firm earns zero economic profit. It produce where price =MC =MR =minimum ATC.

2.

C. the additional production from hiring one more unit of the variable input.

Explanation:

marginal product is the extra product produced by the addition of one more extra unit of input.

Marginal cost is the extra cost occurred with the production of one more extra unit.