When Marginal Cost Is Less Than Average Total Cost

question 94

Multiple Choice

When marginal cost is less than average total cost,

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

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Definitions:

Return on Total Assets

A financial ratio that measures the profitability of a company in relation to its total assets.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reported on the income statement as a non-operating expense.

Net Profit Margin Percentage

A financial metric expressing the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.