If the Total Cost of 20 Units of a Product

question 419

Multiple Choice

If the total cost of 20 units of a product is $20, and the total cost of 21 units is $21, then from 20 to 21 units of product the

• A)marginal cost is decreasing.
• B)marginal cost equals average total cost.
• C)marginal cost equals average variable cost.
• D)average total cost equals average variable cost.

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Definitions:

Gain

An increase in the value of an asset or a decrease in the value of a liability which contributes to an increase in the owner's equity.

Loss

The financial state where expenses exceed revenues within a specific period.

Guaranteed Allowance

An allowance for doubtful accounts that a company anticipates as an expense, guaranteeing a certain value.

Guaranteed Payment

Payments made by a partnership or LLC to a partner or member for services or use of capital, regardless of the entity's income.