Good HOTS Questions. Answers needed.1.) Why MC is Not affected by TFC(3 marks)2.) True/false wth reason - AC curve falls only when MC curve falls(2marks)3') The minimum point of AC curve is to the right of AVC curve. WHY?(3 marks)4')(Explain) the shape of AR and MR curves in different market forms. (6 marks)Thank You Experts
Ans 3) The minimum point of AC is to the right of minimum point of AVC indicating that AC reaches its minimum point much later than the minimum point of AVC. This is because of the fact that AC comprises of both the Average Fixed Cost and Average Variable Cost. Once AVC reaches its minimum, it starts rising. However, the initial rise in AVC is offset by the falling AFC such that AC still falls. it is only when the rise in AVC dominates over the fall in AFC that AC starts rising.
Ans 4) U
Under imperfect competition market, both AR curve and MR curve are downward sloping and is falling throughout all levels of output, however, the AR curve remains above the MR curve.