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If the marginal propensity of consumption begins to decline what will happen to the average propensity of consumption?
If the marginal (per unit) consumption goes down, then the average consumption will also go down because the average is a function of each unit's individual value.
In other words, if the marginal perpensity to consume for the past 3 months was .2 each month, and for the next month it went down to .1, then your average would be:
Month 1 Avg = .2
Month 2 Avg = .2 (.2+.2/2)
Month 3 Avg = .2 (.2+.2+.2/3)
Month 4 Avg = .175 (.2+.2+.2+.1/4)
What else can I help you with?
Relationship between marginal cost and average total cost?
The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.
When does total utility decrease and marginal utility increase?
Total utility decreases when the consumption of a good exceeds a level where additional consumption leads to dissatisfaction or negative experiences. Marginal utility, which measures the additional satisfaction gained from consuming one more unit of a good, can increase in specific scenarios, such as when the consumption of a good is initially low and additional units provide greater satisfaction. However, generally, as more units are consumed, marginal utility tends to decline due to the law of diminishing marginal utility. Thus, a scenario where total utility decreases and marginal utility increases is uncommon and typically reflects unique circumstances or changes in consumer preferences.
Why is it possible for average cost to be decreasing while marginal cost is increasing?
Average cost can be decreasing while marginal cost is increasing due to the effect of scale. When a firm produces more output, the average cost may decline as fixed costs are spread over a larger number of units, leading to economies of scale. However, marginal cost can increase if the firm experiences diminishing returns, where adding more inputs leads to less efficient production. Thus, while each additional unit may cost more to produce, the overall average cost can still decrease if the increase in output sufficiently offsets the rising marginal costs.
When the marginal product of the variable input begins to decrease total product also begins to decrease?
When the marginal product of a variable input starts to decline, it indicates that each additional unit of that input contributes less to overall output. However, total product may not immediately decrease; it can still increase at a slower rate. Total product only begins to decrease when the marginal product turns negative, meaning additional input actually reduces overall output. Thus, a decline in marginal product signals diminishing returns, but not necessarily a decrease in total product until a further threshold is crossed.
Why marginal product first rise then declines?
The marginal product initially rises due to the efficient utilization of fixed resources when additional units of a variable input are added, leading to increased output. As more units are added, however, diminishing returns set in; each additional input contributes less to overall production because the fixed resources become over-utilized or congested. This results in a decline in marginal product, as the benefits of adding more input diminish. Ultimately, this interplay between efficiency and resource limitations explains the initial rise followed by the decline in marginal product.
Is it impossible for marginal profits to decline if average profits are positive?
yes it is
Relationship between marginal cost and average total cost?
The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.
When does total utility decrease and marginal utility increase?
Total utility decreases when the consumption of a good exceeds a level where additional consumption leads to dissatisfaction or negative experiences. Marginal utility, which measures the additional satisfaction gained from consuming one more unit of a good, can increase in specific scenarios, such as when the consumption of a good is initially low and additional units provide greater satisfaction. However, generally, as more units are consumed, marginal utility tends to decline due to the law of diminishing marginal utility. Thus, a scenario where total utility decreases and marginal utility increases is uncommon and typically reflects unique circumstances or changes in consumer preferences.
Are marginal revenue average revenue and price are all equal for a monopolist?
No, in a monopolistic market, marginal revenue is less than average revenue and price. This is because the monopolist must lower the price in order to sell more units, leading to a decline in revenue per unit.
Why is it possible for average cost to be decreasing while marginal cost is increasing?
Average cost can be decreasing while marginal cost is increasing due to the effect of scale. When a firm produces more output, the average cost may decline as fixed costs are spread over a larger number of units, leading to economies of scale. However, marginal cost can increase if the firm experiences diminishing returns, where adding more inputs leads to less efficient production. Thus, while each additional unit may cost more to produce, the overall average cost can still decrease if the increase in output sufficiently offsets the rising marginal costs.
What was the 2001 decline in metal consumption?
Metal consumption declined by 12 percent in 2001 and by another 10 percent in 2002.
Did U.S. consumption of molybdenum in steel applications decline in 1998?
U.S. consumption of molybdenum in steel applications dropped about 10 percent in 1998
What was the reason for the sharp decline in us oil consumption in 1973 and 1979?
a drop in reserves.
When the marginal product of the variable input begins to decrease total product also begins to decrease?
When the marginal product of a variable input starts to decline, it indicates that each additional unit of that input contributes less to overall output. However, total product may not immediately decrease; it can still increase at a slower rate. Total product only begins to decrease when the marginal product turns negative, meaning additional input actually reduces overall output. Thus, a decline in marginal product signals diminishing returns, but not necessarily a decrease in total product until a further threshold is crossed.
Why marginal product first rise then declines?
The marginal product initially rises due to the efficient utilization of fixed resources when additional units of a variable input are added, leading to increased output. As more units are added, however, diminishing returns set in; each additional input contributes less to overall production because the fixed resources become over-utilized or congested. This results in a decline in marginal product, as the benefits of adding more input diminish. Ultimately, this interplay between efficiency and resource limitations explains the initial rise followed by the decline in marginal product.
How much will gas consumption decline if Catalytic converter is broken?
Impossible to say, will vary from vehicle to vehicle.
What is the Productivity impact and decline of natural resources?
Productivity is the average amount of produce per unit area.Data on input per unit area,energy consumption,cost per unit area,etc.are used to calculate productivity.
