Whenever the Marginal Cost Curve Lies Above the Average Total

question 40

Multiple Choice

Whenever the marginal cost curve lies above the average total cost curve,

• A) average variable cost is decreasing.
• B) average total cost is decreasing.
• C) average fixed cost is increasing.
• D) average total cost is increasing.
• E) average fixed cost must be constant.

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Definitions:

Differentiated Oligopolists

Firms within an oligopoly market structure that sell products or services that are distinguishable from each other through branding, quality, or other features.

Herfindahl Index

A measure of market concentration that squares and sums the market share percentages of all firms within an industry.

Four-Firm Concentration Ratio

The four-firm concentration ratio is a measure used to assess the competitiveness of a market by calculating the combined market share of the four largest firms within an industry.

Herfindahl Index

A measure of the size of firms in relation to the industry and an indicator of the competition level among them.