Which of the Following Statements About Average Costs Is False

question 82

Multiple Choice

Which of the following statements about average costs is false?

• A)The difference between average total cost and average variable cost does not change as output increases.
• B)Average fixed cost decreases as output increases.
• C)Average variable cost first decreases and then increases as output increases.
• D)Average total cost first decreases and then increases as output increases.
• E)The difference between average total cost and average variable cost is average fixed cost.

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Definitions:

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.

Allocative Efficiency

A condition where resources are distributed according to consumer preferences, optimizing utility for both producers and consumers.

Production

The process of creating goods or services by combining various inputs like labor, materials, and technology.

Total Revenue

The total income a firm receives from selling its products or services, calculated by multiplying the price per unit by the number of units sold.