As We Observe the Cost Curves Graph, We See That

question 52

Multiple Choice

As we observe the cost curves graph, we see that the

• A) MC constantly falls as output increases.
• B) ATC curve always has a negative slope.
• C) MC curve cannot be U-shaped.
• D) MC curve intersects the ATC curve at its maximum.
• E) MC curve intersects the AVC curve and ATC curve at their minimums.

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Definitions:

Pre-Tax Net Income

The income that a company earns before any taxes are deducted, reflecting the earnings from its core business operations.

Variable Costs

Expenses that change in proportion to the activity or volume of a business operation.

Fixed Costs

Expenses unaffected by the quantity of production or sales, encompassing items like monthly rent, staff remuneration, and various insurances.

Cost Behaviors

The way in which costs change in relation to changes in a firm's level of production or activity, including fixed, variable, and mixed costs.