When Marginal Cost Is Greater Than Average Total Cost, the

question 418

Multiple Choice

When marginal cost is greater than average total cost, the

• A) marginal cost decreases as output increases.
• B) marginal cost does not change as output increases.
• C) average total cost increases as output increases.
• D) average total cost decreases as output increases.

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Definitions:

Quantity Supplied

The amount of a particular good or service that suppliers are willing and able to provide at a given price during a certain period.

Demand Function

A mathematical expression showing the relationship between the quantity demanded of a good and its price, holding other factors constant.

Supply Function

A numerical model illustrating how the amount of a product provided is related to its cost.

Subsidy

A subsidy is a financial contribution provided by the government or a public body to support businesses, consumers, or sectors, reducing the price of goods or services.