Which of the Following Statements Is Necessarily True for a Production

question 93

Multiple Choice

Which of the following statements is necessarily true for a production process that employs one variable input?

• A)If AP is rising, SAC is falling.
• B)If MP is zero, SMC equals AVC.
• C)If AP is falling, SMC is falling.
• D)The AVC function is U- shaped.

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Definitions:

Incremental Cost

The additional cost that a company incurs when producing one more unit of a product.

Carrying Costs

Expenses associated with holding inventory, including storage, insurance, depreciation, and opportunity costs, that a company must consider in its pricing and inventory management strategies.

Discount Taken

The reduction in the amount payable by a debtor to a creditor if the payment is made within a specified period.

BC Prints

This term does not have a widely accepted financial definition. It might be specific to a context or an organization. NO.