When Marginal Cost Is Greater Than Average Cost, Average Cost

question 390

Multiple Choice

When marginal cost is greater than average cost, average cost is

• A)rising.
• B)falling.
• C)constant.
• D)The direction of change in average cost cannot be determined from this information.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal conditions.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks or bonds.

Financial Management

The strategic planning, organizing, directing, and controlling of financial undertakings in an organization or an institute.

Initial Capital Requirements

The amount of funds required to start a business, covering costs such as land, buildings, equipment, inventory, and working capital.