As Output Increases,average Variable Cost First Declines but Eventually Rises

question 31

Multiple Choice

As output increases,average variable cost first declines but eventually rises because

• A) average variable cost is derived by dividing a constant, the total variable cost, by the output rate.
• B) of the effect of the law of diminishing returns.
• C) it represents the addition to total cost resulting from the last unit of output.
• D) at higher output rates, fixed costs per unit are relatively large.
• E) if output is increased, total variable costs decline, then rise.

---

Definitions:

Quid Pro Quo

A Latin term meaning "something for something," which refers to a mutual agreement where something is given in exchange for something else.

Sexual Harassment

Behaviour of a sexual nature that affects a person’s employment situation.

Job Decisions

The process of making critical choices related to one's career, including job selection, changes, and advancements.

Corporate Culture

The collective values, beliefs, and principles of organizational members that define the organization's character and norms.