If the marginal is less than the average, then the average declines.

 When the marginal product is greater than the average product, average product decreases.

 A firm should hire more workers, if the value of the marginal product of that worker exceeds the cost of hiring or the wage. 

Marginal product cannot be negative.

 When there is increasing marginal returns, total product increases at an increasing rate so marginal product increases. 

When there is diminishing marginal returns, both the total product and marginal product are decreasing.

 With fixed production level, the average product will decline as more workers are employed in the production.

The law of diminishing returns will not take effect if no input is fixed.

When total product declines, marginal product becomes negative and diminishing returns set in.

Negative marginal returns occurs when total product starts to decline as more of the variable input are used in production holding other inputs fixed. 

When the marginal product is negative, total product is decreasing.

Short-run is a time period where some factors are fixed and some are variable.

When there is diminishing marginal returns, as more of a variable input are added to a fixed input, the variable input becomes less productive.

 When the marginal and average products are equal, the marginal product is at the maximum.

Variable inputs are those that can easily be increased or decreased in a short period of time.

 It is easier to measure the marginal product of labor if the output is countable, unlike in services.

When output is zero, fixed cost is also zero.

Explicit costs include the salary you could have earned if you were an employee rather than if you were running your own business.

The marginal cost will always come from the change in the variable cost, not from the fixed cost.

 When output is zero, fixed cost is also zero. 

The ___________ cost does not exist in the long run. 

The ___________ cost does not exist in the long run. 

Which of the following is true?

It changes accordingly with the quantity produced.

 The goal of the firm is to __.

Which of the following can be a source of product differentiation?

Under a perfectly competitive market, the firm's demand curve is also the marginal revenue curve.  

Which of the following conditions is not true if a firm under monopolistic competition is incurring losses?

Which of the following is not a source of market power?

Which of the following is not a characteristic of a perfectly competitive firm?

Examples of industries under this type of market structure are airline, telecommunication, and banking industries.

Advertisements and promotions are needed to communicate the differentiation of the seller's products from its competitors.

The product sold in the market is unique.

The seller is a price taker.

The firm has market power being the sole provider of the product in the market.

Many sellers selling differentiated product

few sellers in the market where each seller serves a large portion/share of the market.

Many sellers selling homogeneous products.

As long as the MR of the firm is greater than the MC, then the firm should increase output to raise profits.

Which of the following conditions is not true in the long-run for a firm under monopolistic competition?