When Marginal Cost Is Less Than Average Cost

question 15

Multiple Choice

When marginal cost is less than average cost,

• A)marginal cost is rising.
• B)average cost is rising.
• C)marginal cost is falling.
• D)average cost is falling.
• E)both marginal cost and average cost are rising.

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Definitions:

Economics

The academic discipline that explores how people, government entities, companies, and countries decide to distribute limited resources to meet their endless desires.

Systematic Mistakes

Errors that individuals consistently make due to predictable psychological biases, often studied in behavioral economics.

Decision Making

The process of selecting among various alternatives or options, typically aiming to achieve the most favorable outcome.

Lack of Confidence

A state where consumers or investors are hesitant to spend or invest due to pessimism about economic conditions.