Determine whether the following statements about a perfectly competitive market are TRUE OR FALSE.
Statement 1: Average cost and marginal cost curves must meet at the minimum of the average cost curve.
Statement 2: When the marginal cost is increasing, the average cost must be increasing.
Statement 3: In short run, the difference between the average total cost and the average variable cost must diminish when output level increases.

Question

Determine whether the following statements about a perfectly competitive market are TRUE OR FALSE.

Statement 1: Average cost and marginal cost curves must meet at the minimum of the average cost curve.

Statement 2: When the marginal cost is increasing, the average cost must be increasing.

Statement 3: In short run, the difference between the average total cost and the average variable cost must diminish when output level increases.

Answer

Statement 1: False; Statement 2: True; Statement 3: False

Answer

Statement 1: True; Statement 2: True; Statement 3: False

Answer

Statement 1: False; Statement 2: False; Statement 3: True

Answer

Statement 1: True; Statement 2: False ; Statement 3: True

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