If Actual Output Is Less Than Equilibrium Output,firms Will ________

question 47

Multiple Choice

If actual output is less than equilibrium output,firms will ________ output to keep from ________ inventories.

• A)increase;accumulating
• B)increase;depleting
• C)decrease;depleting
• D)decrease;accumulating

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor.

Marginal Cost

The incremental cost involved in creating an extra unit of a product or service.

Diseconomies of Scale

Occur when a firm's costs per unit increase as its output increases, opposite to economies of scale.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including labor, materials, and overhead expenses.