If Output Rises and Total Costs Remain Fixed, Then

question 12

Multiple Choice

If output rises and total costs remain fixed, then:

• A)average cost will fall.
• B)average cost will rise.
• C)average cost will eventually increase.
• D)fixed cost will eventually rise.
• E)variable cost will eventually become fixed at some maximum level.

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Definitions:

Dividend

A payout to shareholders from a company's earnings, reflecting the company's earning power and success.

Stock Price

The current price at which a share of a company is being traded on the stock market.

Diversification

Diversification is an investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.

Unsystematic Risk

The risk associated with a specific company or industry that can be mitigated through diversification.