Question

Which of the following statements is false? a. When the marginal product of labor is increasing,...

Which of the following statements is false?
a. When the marginal product of labor is increasing, marginal cost is also increasing.
b. The average fixed cost curve is downward sloping and approaches the horizontal axis as output increases.
c. The marginal cost curve intersects the average variable cost curve at the minimum point of the average variable cost curved.

d. When the marginal cost is greater than the average total cost, the average total cost must be increasing.

please explain why?

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Answer #1

The following statements is false:-

-When the marginal product of labor is increasing, marginal cost is also increasing.

option(A)

As when the marginal product is increasing, the marginal cost decreases since the total output increases at an increasing rate, the cost per unit of output falls and only when the marginal product starts decreasing, would the marginal cost start increasing.

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