If Marginal Cost Exceeds Average Variable Cost, Then ________ Cost

question 313

Multiple Choice

If marginal cost exceeds average variable cost, then ________ cost is ________ as output increases.

• A) average total; at a maximum
• B) average total; falling
• C) average variable; rising
• D) average fixed; at a maximum

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Definitions:

Federal Unemployment Compensation Tax

A tax imposed on employers to fund the federal government's oversight of the state unemployment insurance programs.

Quick Ratio

A liquidity metric that evaluates a company's ability to pay its current liabilities without needing to sell inventory, calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.

Current Liabilities

Obligations or debts that a company is expected to pay off within one year or within its normal operating cycle.

Quick Ratio

A measure of a company’s ability to meet its short-term obligations using its most liquid assets, excluding inventory.