Because Marginal Cost Is Always ________ in the Short Run

question 378

Multiple Choice

Because marginal cost is always ________ in the short run, total variable cost always ________ when output decreases.

• A) positive; increases
• B) positive; decreases
• C) negative; increases
• D) negative; decreases

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Definitions:

Average Revenue

The amount of income generated per unit of sale or the total revenue divided by the quantity of products or services sold.

Marginal Revenue

The income boost obtained through the sale of one extra unit of a product or service.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller can influence the market price.

Advertising

The activity or profession of producing advertisements for commercial products or services to influence consumer behavior.