Average Variable Cost and Average Total Costs Get Closer Together

question 375

Multiple Choice

Average variable cost and average total costs get closer together as output increases because

• A) diminishing returns set in.
• B) average fixed costs decrease as output increases.
• C) marginal costs decrease as output increases.
• D) economies of scale become apparent.

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Definitions:

Positive

An attribute or condition that denotes the presence of a particular trait, value, or outcome, typically associated with desirable results.

Moderate

Describes something, such as an opinion, climate, or behavior, that is not extreme or excessive; mild or within reasonable limits.

Cloudy Days

Days characterized by a significant coverage of the sky by clouds, often associated with overcast weather conditions.

Linear Association

A relationship between two variables that can be represented by a straight line on a graph.