If Average Cost Is Falling, Then Marginal Cost Must Be

question 167

True/False

If average cost is falling, then marginal cost must be less than average cost.

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Definitions:

Relative Value

A measure of the worth of something in comparison to the price, quantity, or value of another item or measure.

Prepayment

The act of paying for goods, services, or expenses in advance before receiving or using them.

Capitation

A payment structure in which a health maintenance organization pre-pays an annual set fee per patient to a physician.

Managed Care

A health care delivery system designed to manage cost, utilization, and quality, where care is delivered under established guidelines and oversight by a managing organization.