Average Total Cost Necessarily Rises Due to Which of the Following

question 168

Multiple Choice

Average total cost necessarily rises due to which of the following?
(i) rising marginal cost
(ii) increasing marginal product
(iii) decreasing marginal cost

• A)(i) only
• B)(i) and (ii)
• C)(ii) only
• D)none of the above

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Definitions:

Opportunity Cost

Opportunity cost is the value of the next best alternative forgone as the result of making a decision.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitors.

Absolute Advantage

The ability of an entity to produce more of a good or service than competitors using the same amount of resources.

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than other entities, leading to more efficient trade possibilities.