Asked by
Tyrannee Monroe
on Oct 12, 2024
Verified
When marginal cost is less than average variable cost,average variable cost is falling.
Statement II: As output rises,average fixed cost declines.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false
Average Variable Cost
The total variable costs incurred by a firm divided by the quantity of output produced.
Marginal Cost
The extra cost resulting from the manufacture of an additional unit of a product or service.
Average Fixed Cost
The total fixed costs of production divided by the quantity of output produced, indicating how fixed costs dilute with increased production.
- Become familiar with the association between marginal cost, average variable cost, and average total cost.
- Illustrate the ramifications of output alteration on fixed, variable, and total cost measures.
Verified Answer
MD
Learning Objectives
- Become familiar with the association between marginal cost, average variable cost, and average total cost.
- Illustrate the ramifications of output alteration on fixed, variable, and total cost measures.