Micro

Production & Costs

Medium

Identify the correct statements from the following:

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

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

C. Average fixed cost curve is upward sloping

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

Choose the correct answer from below:

C and D only

A, B and C only

B, C and D only

A, B and D only

✅ Correct Option: 4

Marginal cost curves always cut the corresponding average cost curves from below at their minimum points, so A, B and D are correct. The AFC curve is a rectangular hyperbola that slopes downward as output rises, so C is incorrect. Hence A, B and D only.

2025: 3 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Total Cost	(I) Change in total cost when an additional unit of output is produced.
(B) Marginal Cost	(II) Vertical summation of Average Fixed Cost (AFC) and Average Variable Cost (AVC) curves.
(C) Fixed Cost	(III) Explicit Costs + Implicit Costs.
(D) Short period Average Cost (AC) Curve	(IV) Does not change with increase or decrease in output.

Choose the correct answer from the options given below:

2025: 27 May Shift 2

In inverse 'U'-shaped average product curve; as long as the value of Marginal Product remains higher than the value of the average product, in this condition the average product continues to ..........

2025: 3 June Shift 2

In the short run, the shape of the average fixed cost curve for a typical firm is?

2025: 30 May Shift 2

The shape of the long-run average cost curve and long-run marginal cost curve.

2025: 22 May Shift 1

In the long run, average cost must be rising as the firm increases output as long as the.......... operates.

2025: 27 May Shift 2

At the minimum point of the long run average cost curve .......... is observed.

Solution

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