If Marginal Cost Increases When Output Increases,then

question 155

Multiple Choice

If marginal cost increases when output increases,then

• A) marginal product must decrease when output increases.
• B) average fixed cost is constant.
• C) total cost is constant.
• D) average variable cost must increase when output increases.
• E) average total cost must decrease when output increases.

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Definitions:

Marginal Revenue Product

The increase in revenue generated from the use of one more unit of a factor of production.

Perfect Competitor

A theoretical market structure where many firms sell identical products, allowing no single firm to influence market prices.

Imperfect Competitor

A firm or entity in a market structure that does not meet the criteria of perfect competition, often having some control over price.

Output Price

The price at which goods or services produced by a company are sold in the market.