If ATC = $10,AVC = $6,AFC = $3 and MC

question 31

Multiple Choice

If ATC = $10,AVC = $6,AFC = $3 and MC = $5,then if output increased by one unit:

• A)MC will increase.
• B)MC will decrease.
• C)ATC will increase.
• D)MC may be increasing or decreasing.
• E)AFC will increase.

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Definitions:

Product

An item or substance that is manufactured or refined for sale.

Multiplying

The mathematical operation of increasing one number by the value of another, resulting in a total that is the product of the two numbers.

Kilo-

A prefix in the metric system representing one thousand (1000) of the unit it precedes.

Decimal

Numbers that are expressed as a fraction of a part using 10 as its base number; it also refers to the period used to separate a whole number from a fraction, as in 10.2, otherwise read as “ten and two-tenths.”