When Marginal Cost Exceeds Average Total Cost,what Do We Know

question 50

Multiple Choice

When marginal cost exceeds average total cost,what do we know

• A)Average fixed cost must be rising.
• B)Average total cost must be rising.
• C)Average total cost must be falling.
• D)Marginal cost must be falling.

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Definitions:

Marginal Cost

The cost associated with producing an additional unit of a product, emphasizing its importance in economic decision-making.

Average Cost

The total cost of production divided by the quantity produced, measuring the cost on a per-unit basis.

Surplus

When the quantity supplied of a commodity surpasses the quantity demanded, often resulting in a decrease in price to balance the disparity.

Monopolist

An individual or entity that has exclusive control over the production and selling of a particular good or service.