Average Variable Cost and Average Total Costs Get Closer Together

question 375

Multiple Choice

Average variable cost and average total costs get closer together as output increases because

• A) diminishing returns set in.
• B) average fixed costs decrease as output increases.
• C) marginal costs decrease as output increases.
• D) economies of scale become apparent.

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Definitions:

Exposure Wear-Out

The phenomenon whereby repeated exposure to an advertisement leads to decreased consumer response over time.

Habituation

The process by which an individual becomes accustomed to a stimulus after repeated exposure, leading to a decrease in response.

Advertising Fatigue

A phenomenon where consumers become desensitized or indifferent to marketing messages after being exposed to them excessively.

Counter-Attitudinal Advocacy

The practice of advocating or arguing for a viewpoint that contrasts with one's personal beliefs, often used in persuasion and attitude change experiments.