Average Cost

question 24

Multiple Choice

Average cost

• A)is always larger than marginal cost.
• B)declines for some range of output, hits a minimum, and then increases.
• C)is always smaller than marginal cost.
• D)is total cost/price of the product.

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Definitions:

Consumer Satisfaction

A measure of how products and services supplied by a company meet or surpass customer expectation.

Diminishing Marginal Utility

The principle that as a person consumes more of a product, there is a decline in the additional satisfaction or utility that person derives from consuming one more unit of the product.

Equality-Efficiency Trade-Off

This concept deals with the balance or compromise between achieving a more equitable distribution of resources and maximizing economic efficiency.

Income Equality

A situation in which earnings are distributed evenly across members of a society, reducing income disparities.