Answer to Question #36518 in Microeconomics for lasisi

Question

if the AC of a firm is less than MC of any output, this means that?

a. thats a condition of perfect competition
b. AC decreases when their is increase in general production
c. AC increases with increase in production
d. MC is independent from total production

Answer 1

The right answer is d. MC is independent from total production, because MC should intersect AC in definite point, so there should be the segment, where AC>MC. So, if they don't intersect, MC is independent from total production.