As Output Is Expanded, If Marginal Cost (MC) Is Less

question 159

Multiple Choice

As output is expanded, if marginal cost (MC) is less than average total cost (ATC) ,

• A) ATC must be at its minimum.
• B) ATC must be at its maximum.
• C) ATC must be decreasing.
• D) the firm must be earning economic profit.

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Definitions:

Legal Barriers

Restrictions established by law or regulation that control how businesses operate, often to limit competition or protect consumers.

Short Run

In economics, a period in which at least one factor of production is fixed, allowing for limited adjustments to changes in demand or supply.

Long Run

A period in economics where all resources and inputs can be fully adjusted or changed, contrasting with the short run where some are fixed.

Marginal Revenue

The revenue uplift experienced by selling an additional unit of a product or service.