One of the Most Important Properties of Cost Curves Is

question 397

Multiple Choice

One of the most important properties of cost curves is that

• A) for most producers,the average total cost curve never crosses the marginal cost curve.
• B) the average fixed cost curve must eventually rise.
• C) the average total cost curve first rises,then falls with increased output.
• D) the marginal cost curve eventually rises with the quantity of output.

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Definitions:

Allowance Account

An accounting reserve set up to account for future adjustments such as bad debts or product returns.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly written off against income at the time they are deemed non-collectable.

Allowance for Doubtful Accounts

An accounting provision representing the estimated portion of receivables that may not be collected.

Accounts Receivable

Represents money owed to a company by its customers for goods or services delivered but not yet paid for.