micro ch 8

The​ short-run average cost of production is the same for all quantities.

false

Whenever the marginal cost exceeds the average​ cost, the average cost will rise with another unit of output. Whenever the marginal cost is less than the average​ cost, the average cost will fall with another unit of output.

When marginal cost is less than average​ cost, an increase in output down arrow↓ average cost. When marginal cost exceeds average​ cost, an increase in output up arrow↑ average cost.

Whenever marginal cost is less than average​ cost, average cost is falling. Whenever marginal cost exceeds average​ cost, average cost is rising. ​ Finally, when marginal cost equals average​ cost, average cost is neither rising nor falling.​ Therefore, the marginal cost curve intersects the​ short-run average total cost curve at its minimum point.

A marginal cost curve intersects the average cost curve at the minimum point of the average cost curve.

Over the positively sloped portion of the​ short-run average-cost​ curve, the effect of​ ________ dominates the effect of​ ________.

diminishing marginal​ returns; falling average fixed cost