Short-Run Cost Curves (Part 3)- Micro Topic 3.2

Mr. Clifford explains cost curves, focusing on marginal and average total costs. He describes why marginal cost is U-shaped due to diminishing returns and how average total cost is influenced by marginal cost. The video also covers the behavior of average variable cost in relation to marginal cost.

Which of the following is NOT a type of cost curve discussed in the video?

• Average fixed cost

• Average marginal cost

• Average variable cost

• Average total cost

What causes the marginal cost curve to initially decrease?

• Decreasing total cost

• Increasing average cost

• Worker specialization

• Increasing fixed resources

Why does the marginal cost curve eventually start to rise?

• Due to increasing total cost

• As a result of decreasing average cost

• Because of fixed resources

• Due to increasing specialization

How does a marginal cost below the average total cost affect the average total cost?

• It increases the average total cost

• It decreases the average total cost

• It has no effect on the average total cost

• It stabilizes the average total cost

What happens to the average total cost when the marginal cost is above it?

• The average total cost decreases

• The average total cost remains constant

• The average total cost becomes zero

• The average total cost increases