Which of the Following Statements Is True

question 198

Multiple Choice

Which of the following statements is true?

• A)As output increases, average fixed cost becomes smaller and smaller.
• B)Average fixed cost does not change as output increases.
• C)The marginal cost curve intersects the average fixed cost curve at its minimum point.
• D)When marginal cost is greater than average fixed cost, average fixed cost increases.

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Definitions:

Share Repurchase

A process where a company repurchases its own stock from the market, leading to a decrease in the total shares available publicly.

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their holdings in a stock rather than relying on the company's dividend payments.

Dividend Reinvestment Program

A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

Transaction Costs

Expenses incurred when buying or selling goods and services, including fees, taxes, and other charges.