A firm uses a single variable input x to produce outputs according to the production function f (x)  300x 6x2.This firm has fixed costs of $300.This firm's short-run marginal cost curve lies below its short-run average variable cost curve for all positive values of x.

Question

A firm uses a single variable input x to produce outputs according to the production function f (x)   300x 6x2.This firm has fixed costs of $300.This firm's short-run marginal cost curve lies below its short-run average variable cost curve for all positive values of x.

Emily Gomes · Accepted Answer

Final Answer : False, Explanation :  The marginal cost (MC) is the derivative of the total cost (TC) with respect to quantity, and it intersects the average variable cost (AVC) curve at its minimum point, not lies below it for all positive values of x. The statement incorrectly suggests that MC is always below AVC, which contradicts the typical behavior of cost curves in economic theory.

A firm uses a single variable input x to produce outputs according to the production function f (x) 300x 6x2.This firm has fixed costs of $300.This firm's short-run marginal cost curve lies below its short-run average variable cost curve for all positive values of x.

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