It Is Important to Evaluate a Corporate Manager's Financial Decision

question 65

True/False

It is important to evaluate a corporate manager's financial decision by measuring the effect the decision should have on the corporation's stock price if everything else were held constant.

---

Definitions:

Average-Total-Cost Curve

A graphical representation showing how the average total cost of producing a good changes as the quantity produced changes.

Average-Fixed-Cost

The fixed costs of production divided by the quantity of output produced; it decreases as production increases.

Average-Variable-Cost

The total variable cost divided by the quantity of output produced.

Marginal Costs

The investment required to manufacture an incremental unit of a product or service.