Asked by
Mariel Antonio
on Dec 04, 2024
Verified
Consider the following statements when answering this question: I. A firm's marginal cost curve does not depend on the level of fixed costs.
II) As output increases the difference between a firm's average total cost and average variable cost curves cannot rise.
A) I is true, and II is false.
B) I is false, and II is true.
C) I and II are both true.
D) I and II are both false.
Marginal Cost Curve
A curve that illustrates how the cost of producing an additional unit of a good changes as the output level is increased.
Fixed Costs
Costs that do not vary with the level of output or activity, such as rent, salaries, or loan payments.
Average Total Cost
The total cost of production divided by the number of units produced, representing the per-unit cost of production.
- Understand the interpretation of cost curves, including the forms they take, how they can move, and the connections between them over both short and long periods.
- Ascertain the impact of fixed expenses on an organization's cost framework and its decision-making processes.
Verified Answer
BJ
Learning Objectives
- Understand the interpretation of cost curves, including the forms they take, how they can move, and the connections between them over both short and long periods.
- Ascertain the impact of fixed expenses on an organization's cost framework and its decision-making processes.