If Marginal Cost Is Above Average Variable Cost, Then

question 268

Multiple Choice

If marginal cost is above average variable cost, then

• A) average variable cost is increasing.
• B) marginal cost must be decreasing.
• C) average variable cost is constant.
• D) average variable cost is decreasing.

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Definitions:

Tax

Mandatory financial charge imposed by a government on individuals, companies, or transactions to fund public expenditures.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, indicating economic benefit.

Tax

Compulsory financial charges or other types of levies imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the higher price they actually receive, representing the benefit to producers.