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on Dec 04, 2024Verified
Which of the following relationships is NOT valid?
A) Rising marginal cost implies that average total cost is also rising.
B) When marginal cost is below average total cost, the latter is falling.
C) When marginal cost is above average variable cost, AVC is rising.
D) none of the above
Marginal Cost
The change in total cost that arises when the quantity produced is incremented by one unit.
Average Total Cost
The total cost of production divided by the total quantity produced, representing the cost per unit of output.
Average Variable Cost
The per-unit variable cost of production, calculated by dividing total variable costs by the quantity of output produced.
- Analyze the relationship between marginal cost and various average costs (total, variable, fixed) in cost behavior.
Verified Answer
NP
Learning Objectives
- Analyze the relationship between marginal cost and various average costs (total, variable, fixed) in cost behavior.