Micro

Production & Costs

Medium

Which one of the following conditions is incorrect?

(Where, SMC - Short term Marginal Cost, AVC - Average Variable cost, SAC - Short run average cost, LRMC - Long run marginal cost, LRAC - Long run average cost.)

SMC curve cuts the AVC curve from below at the minimum point of AVC

SMC curve cuts the SAC curve from below at the minimum point of SAC

LRMC curve cuts the LRAC curve from above at the minimum point of LRAC

LRMC curve cuts the LRAC curve from below at the minimum point of LRAC

✅ Correct Option: 3

A marginal cost curve always cuts the corresponding average cost curve from below at the latter's minimum point. So SMC cuts AVC and SAC from below at their minima, and LRMC cuts LRAC from below at its minimum. The statement that LRMC cuts LRAC from above is therefore incorrect, making option 3 the answer.

2025: 13 May Shift 2

To increase the output by a certain proportion, if inputs need to be increased by more than that proportion, that condition lies in which of the following?

2026: 20 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Total Cost (TC)	(I) Total variable cost/ Quantity (TVC/Q)
(B) Average Variable Cost (AVC)	(II) Total Fixed Cost / Quantity (TFC/Q)
(C) Short run average cost (SAC)	(III) Total Variable Cost + Total Fixed Cost.
(D) Average fixed cost (AFC)	(IV) Average Variable Cost + Average Fixed Cost.

Choose the correct answer from the options given below:

2026: 11 May Shift 1

What happens to the total cost (TC) of production if the quantity of output in the production is reduced to 0 (zero)?

Where, TC=Total cost, FC=Fixed Cost, VC=Variable Cost.

2025: 30 May Shift 1

Which of the following cost curve has the shape of a rectangular hyperbola?

2026: 13 May Shift 2

Keeping all other inputs constant, when a firm changes the labour from 3 to 4, the total product changes from 40 to 50. What is the marginal product of the 4th unit of labour?

2025: 13 May Shift 2

When we have proportionately more output than input this economic concept is known as .........

Which one of the following conditions is incorrect? (Where, SMC - Short term Marginal Cost, AVC - Average Variable cost, SAC - Short run average cost, LRMC - Long run marginal cost, LRAC - Long run average cost.)

Solution

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CUET Economics Past Year Questions (Topic-Wise)

Which one of the following conditions is incorrect?

(Where, SMC - Short term Marginal Cost, AVC - Average Variable cost, SAC - Short run average cost, LRMC - Long run marginal cost, LRAC - Long run average cost.)