If Marginal Cost Is Rising, Then Average Cost Must Be

question 230

True/False

If marginal cost is rising, then average cost must be rising.

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Definitions:

Demand Curve

A chart that displays how the cost of an item correlates with the amount of that item buyers are prepared to buy at different price levels.

Unregulated Monopolist

A monopoly that operates without regulatory oversight, setting prices and output levels without external control.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the financial gain in excess of the opportunity costs of resources used.

X-Inefficiency

The difference between efficient behavior of enterprises assumed or implied by economic theory and their observed behavior in practice, often due to a lack of competitive pressure.