Diminishing marginal returns occurs when 26 1000 a total physical product (TPP) is decreasing and marginal physical product (MPP) is increasing b. both total physical product (TPP) and marginal physical product (MPP) are increasing c. total physical product (TPP) is increasing and marginal physical product (MPP) is decreasing d. both total physical product (TPP) and marginal physical product (MPP) are decreasing Given a production function, with increase in the input level 27 1.000 a. The average product decreases o .b. The average product first decreases and then increases O The average product first increases and then decreases .d. All statements are incorrect 28 A producer discovers that if she were to increase her firm's quantity (a) from 300 to 400 units per day in the short run the average cost per unit of quantity (c) would decrease she can conclude that from 300 to 400 units of quantity produced total fixed cost (TEC) decreases b. All statements are incorrect total cost (1) decreases o d. marginal cost (MC) decreases If a firm has no fixed cost, it follows that 29 100 a none of the statements true b. average variable cost achieves a minimum at the same point that the average total cost achieves a minimum Caverage variable cost equals average total costo d the firm would stop production it price were less than average total costo If there are a large number of firms selling a homogenous product, an individual firm's demand curve becomes 30 1.00 a close to vertical o b. pricainelastico c close to horizontal d. income elastico