MC first falls and then rises because

the marginal product of the variable input first rises and then fallsCorrect answerYour answerfixed cost first falls and then risesCorrect answerYour answerthe price of output changesCorrect answerYour answerdemand first rises and then fallsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

MC = wage ÷ MP of labour. While MP rises, each extra unit needs less labour, so MC falls.
Once MP diminishes, each extra unit needs more labour, so MC rises.

Concept: Why MC is U-shaped
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe shapes of the cost curves

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Ten questions from Cost Curves, at your own pace.

MC first falls and then rises because

Explanation