Whenever Average Total Cost Exceeds Marginal Cost

question 76

Multiple Choice

Whenever average total cost exceeds marginal cost,

• A) average total cost is rising.
• B) average total cost is falling.
• C) marginal cost is rising.
• D) marginal cost is falling.

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Definitions:

Administrative Expenses

Costs associated with the general management of a business, such as salaries of senior executives, legal and financial charges, marketing, and office supplies.

Direct Materials

Materials that can be directly linked to the manufacturing of particular products or services.

Units Sold

The total quantity of products or services sold within a specific period, often used to measure business performance.

Direct Labor

The labor costs directly tied to the production of goods or the provision of services.