Even as fixed average cost continues to fall the average variable cost begins to rise because:

CA Foundation · Business Economics · MTP · September 2025
Even as fixed average cost continues to fall the average variable cost begins to rise because:
(A) A. return to factor start diminishing
(B) B. return to factor start rising
(C) C. input price start rising
(D) D. producer budget starts shrinking

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. return to factor start diminishing

Topics: Theory of Production and Cost

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