If the Marginal Cost Curve Is Below the Average Variable

question 164

Multiple Choice

If the marginal cost curve is below the average variable cost curve, then

• A) average variable costs are increasing.
• B) average variable costs are decreasing.
• C) marginal cost must be decreasing.
• D) average variable costs could either be increasing or decreasing.

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Definitions:

Ending Inventory

The total value of all unsold goods that a company has in stock at the end of an accounting period.

Units

A measure of quantity or amount in terms of a standardized value, often used to quantify the output or production of goods.

Produced

Refers to items or goods that have been created or manufactured.

Direct Materials

Raw materials that can be directly attributed to the production of a product, and are an integral part of the finished product.