Whenever Marginal Cost Is Greater Than Average Total Cost

question 95

Multiple Choice

Whenever marginal cost is greater than average total cost,

• A)marginal cost is rising.
• B)marginal cost is falling.
• C)average total cost is rising.
• D)average total cost is falling.

---

Definitions:

Isocost Line

Represents all combinations of inputs that cost the same amount for a firm, illustrating budget constraints in production theory.

Price of Capital

The cost of using capital assets in production, which can include interest rates on loans or opportunity costs of using owned capital.

Price of Labor

The wage or salary paid for the services of an employee or worker; essentially the cost of hiring labor.

Isocost Line

A line on a graph representing all combinations of inputs that have the same total cost.