What Is Not True If a Firm Exhibits Decreasing Average

question 74

Multiple Choice

What is not true if a firm exhibits decreasing average cost as quantity increases?

• A)Marginal cost must be below average cost.
• B)Firms would go bankrupt if all prices were equal to marginal cost.
• C)More customers can be served at lower average costs per unit.
• D)This is called diseconomies of scale.

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Definitions:

Iron

A chemical element with the symbol Fe, essential for various biological processes including oxygen transport in hemoglobin.

Capillaries

The smallest blood vessels in the body's circulatory system, where the exchange of water, oxygen, carbon dioxide, and other nutrients and waste substances occurs between blood and tissues.

Arterioles

Small blood vessels that extend and branch out from arteries and lead to capillaries, playing a key role in regulating blood pressure.

Vena Cava

The two large veins (the superior vena cava and the inferior vena cava) that carry deoxygenated blood from the body back to the heart.