When Marginal Cost Is Below Average Total Cost

question 106

Multiple Choice

When marginal cost is below average total cost:

• A) total cost is falling.
• B) total cost is rising.
• C) average total cost is falling.
• D) average fixed cost is rising.
• E) total variable cost is falling.

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Definitions:

Single Delivery

Refers to the process where all goods under a contract are delivered at once, rather than in separate instalments.

Installments

Payments made over time in parts or fractions towards settling a total debt or purchase price.

Commercial Impracticability

A doctrine under which a party may be released from a contract due to unforeseen and hardship-causing events that make the contract's performance infeasible.

Contractual Obligations

Legal commitments arising from contracts that parties have agreed to and are bound to fulfill.