As Output Is Expanded, If MC Is Less Than ATC

question 171

Multiple Choice

As output is expanded, if MC is less than ATC,

• A) ATC must be at its minimum.
• B) ATC must be at its maximum.
• C) ATC must be decreasing.
• D) the firm must be earning economic profit.

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Definitions:

Annual Rate

The interest rate stated on a yearly basis, often used in the context of savings accounts, loans, or investments to represent the yearly cost or return.

Return

The fiscal upwards or downwards movement in the value of an investment over a defined period, portrayed as a percentage of the investment’s beginning expense.

Investment

The allocation of resources, usually money, in order to gain profitable returns as interest, income, or appreciation in value.

Present Value

The present worth of a future amount of money, or sequence of cash flows, taking into account a certain return rate, employed in discounting to evaluate investment prospects.