Which of the following statement is NOT true? a. if fixed costs exist, the AVC and ATC...

Which of the following statement is NOT true?

a. if fixed costs exist, the AVC and ATC move away from each other as output decreases

b. diminishing marginal return occurs as more labourers are hired, workers increasingly share the use of other fixed inputs, and so their ability to be increasingly productive is limited.

c. workers have an incentive to exert higher effort when a wage is equal to the income earned minus $20,000 than when a wage is equal to the income earned minus $10,000

d. strengthening of board’s monitoring the hired managers is a way to minimize the agency costs.

Expert Solution

a option is not true because, if the fixed costs exists the output will increase but not decreases. So the given statement is wrong or not true.

All the other statements given are true as per the definitions of the concepts.

keosha answered 2 years ago

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