When Marginal Cost Is Greater Than Average Total Cost

question 7

Multiple Choice

When marginal cost is greater than average total cost,

• A)Average total cost must be increasing with output
• B)Average variable cost must be decreasing with output
• C)Average fixed cost must be increasing with output
• D)Marginal cost must be increasing with output

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Definitions:

Compound Rate

The rate at which interest on an investment or loan is calculated on both the initial principal and the accumulated interest from previous periods.

Time Value of Money

The concept that a sum of money is worth more now than the same amount in the future due to its potential earning capacity.

Present Value

The worth today of money expected to be received in the future or sequences of cash inflows, utilizing a specific return rate.

Compound Value

The future value of an investment, including the principal and the compounded interest over time.