If the ATC Curve Has a Positive Slope, Then the MC

question 77

Multiple Choice

If the ATC curve has a positive slope, then the MC curve must be

• A) horizontal.
• B) vertical.
• C) above the ATC curve.
• D) below the ATC curve.

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Definitions:

Variable Overhead

Costs that change in proportion to the level of production or business activity, such as utilities or raw materials.

Variable Cost

Expenses that vary in direct proportion to changes in the level of production or sales volume.

Fixed Cost

Costs that remain constant in total amount with changes in the volume of activity, such as rent and salaries.

Mixed Cost

Expenses that have both fixed and variable components, changing with the level of activity but also containing a static element.