When cost curves are drawn for a firm, all of the following are generally assumed EXCEPT

Exam Question

When cost curves are drawn for a firm, all of the following are generally assumed EXCEPT

• 1. average fixed costs are constant
• 2. firm is too small to influence factor prices
• 3. average variable cost initially declines, and then rises at higher output levels
• 4. total fixed costs are constant
• 5. marginal product of the variable factor eventually declines

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