The Average Total Cost Curve Is Increasing When Marginal Cost

question 25

Multiple Choice

The average total cost curve is increasing when marginal cost is:

• A)increasing
• B)decreasing
• C)less than average total cost
• D)greater than average total cost

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a certain period, indicating the efficiency of inventory management.

Working Capital

A financial metric representing the operational liquidity available to a business, calculated as current assets minus current liabilities.

Current Ratio

A liquidity ratio measuring a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity, calculating its ability to pay off short-term obligations without selling inventory.