Economics.... NEED help fast!!!?

Question

As marginal cost decreases, average total cost______(increases/decreases)

As marginal product increases, marginal cost_______(increases/decreases).

*** thank you and could you please explain your answer. thanks.

Answer 1

dec & inc

Answer 2

MC decreases, ATC decreases, as when we plot MC and ATC, MC cuts ATC at its minimal point. Hence, the region where MC is decreasing, ATC must be falling as well, since after the turning point where MC is increasing, the ATC is still falling. Draw out your cost curves to get the whole picture ;)

Marginal Product increases, implies increasing return to factor. Since MC measures the gradient of the TC curve, hence when there is increasing return to factor, the gradient of the TC curve is increasing as well. This implies, MC increases as well.