If the Marginal Cost Curve Is U-Shaped

question 112

Multiple Choice

If the marginal cost curve is U-shaped

• A) there are no productivity gains from specialization,only diminishing marginal product.
• B) average fixed costs are continually decreasing.
• C) there are productivity gains from specialization before diminishing marginal product sets in.
• D) the average total cost curve is continually upward sloping.
• E) the average variable cost curve is a straight line.

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Definitions:

Step-down Method

An allocation method used in cost accounting to distribute overhead costs to various cost centers and products in stages based on their usage of services.

Physical Plant Department

The division within an organization responsible for managing and maintaining the physical facilities, including buildings and grounds.

Space Occupied

The amount of physical area taken up by an object, person, or activity, typically measured in square feet or meters.

Step-down Method

The step-down method is an accounting practice used to allocate costs among departments, beginning with the highest cost pool.