If Average Variable Cost Is Falling with Increasing Output, Then

question 91

Multiple Choice

If average variable cost is falling with increasing output, then

• A)marginal cost must be less than average variable cost.
• B)marginal cost must be greater than average variable cost.
• C)average fixed cost is rising.
• D)marginal cost must be rising.
• E)marginal cost must be falling.

---

Definitions:

Double Declining-balance

An accelerated method of depreciation where the book value of an asset is reduced at double the rate of its straight-line depreciation each year.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life, reflecting the use and wear and tear of the asset.

Units-of-production

A method of depreciation that assigns an asset's cost based on its usage, activities, or output, instead of the passage of time.

Depreciation Expense

Depreciation Expense denotes the allocation of an asset's cost over its useful life, reflecting the asset's consumption or decline in value.