Q1 of 30 Page 1

What is the relation between marginal and average variable cost when marginal cost is rising and average variable cost is falling?

- The fall in average variable cost (AVC) is related to the increase in returns to the factor and the rise in marginal cost (MC) is affected by the rise in marginal product. Therefore, it is shown by the rising marginal cost and the falling average variable cost that the marginal cost will lie below the average variable cost.


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2

Suppose the total revenue is rising at a constant rate as more and more units of a commodity are sold, marginal revenue would be:

(Choose the correct alternative)


 3

When does ‘increase’ in demand take place?

 4

‘Homogeneous products’ is a characteristic of: (choose a correct alternative)

 5

There is inverse relation between price and demand for the product of a firm under: (choose a correct alternative)