If a Firm's Average Variable Cost Is Constant Per Unit

question 41

True/False

If a firm's average variable cost is constant per unit, then the firm's average cost decreases continually as output increases because average fixed cost decreases continually.

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Definitions:

Corporation

A business created as a distinct legal entity owned by one or more individuals or entities.

Preferred Shareholders

Investors who own shares of a company that have preferential rights to dividends and asset distribution over common shareholders.

Deep Pockets Mining

A colloquial term suggesting a mining company has substantial financial resources to support long-term investments and operations.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs associated with sustaining the business.