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Why does the average variable cost curve initially slope downward?
Wiki User
∙ 9y ago
The average variable cost curve compares the company's maximum performance to its present state. For example if the minimum profits are to the left of the AC it means the company will decrease profits by increasing their production. Therefore creating a curve.
Wiki User
∙ 9y ago
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Why is average cost and average variable cost are both you shaped?
the average variable cost curve and average cost curve are u- shaped because of the law of variable proportions.
A firm's marginal cost curve above the average variable cost curve is also?
A firm's short run supply curve
What will a monopolist firm do if it's demand curve lies below its average variable cost curve?
It will shut down.
Why Demand Curve slopes downward from left to right?
why demand curve slopes downward from left to the right
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
Why is average cost and average variable cost are both you shaped?
the average variable cost curve and average cost curve are u- shaped because of the law of variable proportions.
A firm's marginal cost curve above the average variable cost curve is also?
A firm's short run supply curve
Why does a production possibility curve have a downward sloping curve?
PPC curve slopes downward for the efficient resouress of another commidty
What will a monopolist firm do if it's demand curve lies below its average variable cost curve?
It will shut down.
Why Demand Curve slopes downward from left to right?
why demand curve slopes downward from left to the right
What is a firm's short run supply curve?
A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve.
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
Is The aggregate demand curve downward sloping for the same reason that the demand curve for a single good is downward sloping?
true because it is still supply and demand downward sloping
What happen to the average variable cost curve when there is a reduction in business property taxes?
There will not be any change.
Why is an Average Fixed Cost curve downward sloping?
This is a simple enough question to answer, Fixed cost is defined as the cost invariant of output, i.e. cost that doesnot change as output increases, i.e. constant. So if you divide a constant by output as a variable, as output increases Average Fixed Costs drop.
How does a market demand curve differ from a demand curve How are they similar?
downward sloping
Why is the Marginal cost curve downward sloping?
Marginal cost curve is u-shaped curve, this is due to law of variable proportion(return to factors), firstly, there is an increasing return (i.e, decreasing cost) then there is a stage of constant returns (i.e, constant cost) then lastly comes the stage of decreasing returns (i.e increasing cost), that`s why marginal cost curve first slopes downward and then slope upward and become u-shaped.
