When Marginal Cost Is BELOW Average Variable Cost,average Variable Cost

question 45

Multiple Choice

When marginal cost is BELOW average variable cost,average variable cost must be:

• A)at its minimum.
• B)at its maximum.
• C)falling.
• D)rising.

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Definitions:

Operating Expenses

Costs associated with running a day-to-day business operation, such as salaries, rent, and utilities.

Mark-up

An extra charge on top of the cost price for items, aimed at covering both overhead expenses and profits, described in terms of a percentage of the initial cost.

Profit or Loss

The financial result of operations, where profit is the excess of revenues over expenses and loss is the deficit.

Annual Sale

A sale event that occurs once a year, often featuring significant discounts on goods and services.