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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost6 Marks
Question
State whether the following statements are true or false. Give reasons for your answer.
  1. When total revenue is constant average revenue will also be constant.
  2. Average variable cost can fall even when marginal cost is rising.
  3. When marginal product falls, average product will also fall.
✓

Answer

  1. False because when TR is constant. AR will fall as output increases.
  2. True, provided MC
  3. False, because AP falls only when MP

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