The Profitability of an Investment Project Will Decrease If

question 117

Multiple Choice

The profitability of an investment project will decrease if

• A)tax rates decrease.
• B)real interest rates increase.
• C)real interest rates decrease.
• D)business tax deductions increase.

---

Definitions:

Average Total Cost

The average total cost is the total cost of production divided by the quantity of output produced.

Marginal Cost Curve

A visual diagram that illustrates the variation in the cost to produce an additional unit of a product as the quantity produced changes.

Average Total Cost Curve

A curve that shows the average cost per unit of output at different levels of production; it typically has a U-shape.

Marginal Cost

The climb in cost associated with generating another unit of a product or service.