If Marginal Cost Is Less Than Average Total Cost, Then

question 50

Multiple Choice

If marginal cost is less than average total cost, then:

• A) average total cost is increasing.
• B) average total cost is decreasing.
• C) marginal cost is necessarily increasing.
• D) marginal cost is necessarily decreasing.

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profitability that includes all expenses except for interest and income tax expenses.

Sales

The transactions of selling goods or services within a specific period.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, displaying net profit or loss.