If Marginal Cost Is Greater Than Average Total Cost, Then

question 428

Multiple Choice

If marginal cost is greater than average total cost, then

• A)profits are increasing.
• B)economies of scale are becoming greater.
• C)average total cost remains constant.
• D)average total cost is increasing.

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Definitions:

Budget Constraint

The limitations on the purchase of goods and services imposed by a budget, representing the combination of goods and services that a consumer can afford with a fixed income.

Giffen Good

A type of good for which demand increases as its price increases, contradicting the basic laws of demand in economics due to the impact of strong income effects.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Labor Supply Curve

A graphical representation showing the relationship between the wages offered and the quantity of labor workers are willing to supply.