Micro

Production & Costs

Easy

In the short run, Average Variable Cost curve is a U-shaped cost curve because of----------------.

Law of Diminishing Marginal Utility

Law of Variable Proportions

Returns to Scale

Law of Demand

✅ Correct Option: 2

In the short run only some inputs are variable, so the law of variable proportions operates: marginal product of the variable input first rises and then falls. Costs move inversely to productivity, so AVC first falls and then rises, giving it a U-shape.

2025: 14 May Shift 1

LRMC cuts the LRAC curve from below at the point where.

2025: 30 May Shift 2

From the following which production function exhibits increasing returns to scale?

2026: 31 May Shift 1

Find the value of total revenue from the following table and arrange those values of total revenue in decreasing order.

Option	Average revenue	Quantity
A	10	2
B	12	1.5
C	14	1.0
D	16	0.5

Choose the correct answer from the options given below:

2026: 6 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Constant returns to scale	(I) When a proportional increase in all inputs results in an increase in output by a larger proportion.
(B) Decreasing Returns to Scale	(II) The relationship between inputs used and output produced by the firm.
(C) Increasing Returns to Scale	(III) When a proportional increase in all inputs results in an increase in output by a smaller proportion.
(D) Production function	(IV) When a proportional increase in all inputs results in an increase in output by the same proportion.

Choose the correct answer from the options given below:

2025: 30 May Shift 2

Choose the correct statements from the options given below in terms of the shapes of the short run cost curves.

(A) Average fixed cost curve is a rectangular hyperbola.

(B) Total fixed cost is horizontal straight line.

(D) Marginal cost is U shaped.

Choose the correct answer from the options given below:

2025: 13 May Shift 1

The point on the supply curve at which a firm earns only normal profit is called ...........

In the short run, Average Variable Cost curve is a U-shaped cost curve because of----------------.

Solution

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