-In the Above Figure, Which of the Following Statements Is

question 357

Multiple Choice

-In the above figure, which of the following statements is FALSE?

• A) Average fixed cost decreases as output decreases.
• B) The vertical gap between curves B and C equals marginal fixed cost.
• C) The vertical gap between curves B and C gets smaller as AFC decreases.
• D) Curve A is the marginal cost curve.

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Definitions:

Economic Models

Simplified frameworks used to illustrate economic processes or theories through mathematical equations or diagrams.

Rationally

Acting based on reason or logic, typically in a way that maximizes self-interest or advantage within certain constraints or information.

Mental Accounting

The cognitive process individuals use to organize, evaluate, and keep track of their financial activities and decisions.

Irrational Decisions

Decisions made that do not follow logical reasoning or expected outcomes.