1.

Suppose that a firm's total fixed cost is Rs. 100, and the marginal cost schedule of a firm is the following : Output (in units)1234567Marginal cost (in Rs)10203040506070 (i) Is the MC curve U-shaped ? (ii) Derive the AVC schedule. Will the AVC curve U-shaped ? Discuss.

Answer»

Suppose that a firm's total fixed cost is Rs. 100, and the marginal cost schedule of a firm is the following :

Output (in units)1234567Marginal cost (in Rs)10203040506070

(i) Is the MC curve U-shaped ?

(ii) Derive the AVC schedule. Will the AVC curve U-shaped ? Discuss.



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