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...Fall problem set solutions points true false uncertain please fully explain your answer including diagrams where appropriate are awarded based on explanations the short run marginal cost curve is always increasing due to law of diminishing returns solution means that will eventually be however at low levels input there can an and mc may decrease rst in perfectly competitive rms with higher xed costs must also charge a price all else equal cannot alter their they takers market furthermore equivalent sunk not aect rm s decision making q p hold this condition determine level output if then average increase as well increases when greater than so but still less production function exhibits decreasing each factor it exhibit scale for example f k l two same b have given by c respectively since has equilibrium general either sell or leave u shaped convex avc point minimized long note vc let variable total av derivative equals which only numerator i e finally we need argue critical corresponds ...