Use the Figure Below to Answer the Following Questions

question 131

Multiple Choice

Use the figure below to answer the following questions. Figure 10.3.2
-Refer to Figure 10.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?

• A)Average fixed cost decreases with output.
• B)The vertical gap between curves B and C is equal to average variable cost.
• C)Line B comes closer to line C as output increases because of a decrease in average fixed cost.
• D)Curve D is the marginal cost curve.
• E)The vertical gap between curves B and C is equal to average fixed cost.

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Definitions:

Cost Pools

Groups of individual costs that are combined to allocate to cost objects, making the allocation process simpler and more standardized.

Cost Allocation

The process of distributing costs across various departments, products, or services within an organization to reflect the true expenses associated with each.

Manufacturing Structures

The organization and setup of production facilities, including the arrangement of machinery, equipment, and workflow, to efficiently produce goods.

Direct Labour

The labor costs for employees who are directly involved in the production of goods or services.