Question

Which of the following statements about graphs of short-run cost curves is false?

Q: Answer-Which of the following statements about graphs of short-run cost curves is false?

Statement b is false, because the SMC and MVC curves actually coincide. MVC shows the change in a firms total variable cost if its output changes by one unit, while SMC shows the change in its short-run total cost if its output changes by one unit. Now, in the short-run, if a firm changes its output by one unit, it can change the quantity of the variable inputs it uses but not the quantity of the fixed inputs, so the change in its total cost equals the change in the cost of its variable inputs.