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Introduction to Economics 1
Introduction to Economics 1 Deneme Sınavı
Introduction to Economics 1 Deneme Sınavı Sorusu #723845
Introduction to Economics 1 Deneme Sınavı Sorusu #723845
When the wage rate is considered, which of the followings occurs as the average product of labor (APL) increases?
The average variable cost increases |
The average variable cost stays the same |
The average variable cost decreases |
The marginal cost continues to fall as long as the average variable cost remains below it |
Marginal cost decreases |
Yanıt Açıklaması:
Given the wage rate, a higher average product of labor (APL) implies a lower average variable cost (AVC) and vice versa. So, as APL increases, AVC decreases and hits its minimum when APL is at its maximum. Once APL starts to fall, AVC begins to rise and generate a U shape. Therefore, the correct option is C.
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