Question

State wheather following statement is "true or false". Give reasons in support of your answer :-
a). In a situation of disguised unemployment MP can be negative.
b). When TP becomes constant, MP is negative.
c). MC rises only when AC is rising .
d). When TR rises with constant rate, MR falls.

Answer 1

Dear student
a) True.In a situation of disguised unemployment MP can be negative because employment of workers more than what is required .It reduces overall efficiency.
b) False.When TP begins to decline, MP becomes negative.
c) False.because for a certain range of output Marginal Cost ( MC) rises when Average Cost (AC) is falling.
d) False because MR remains constant when TR increases at a constant rate.
Regards