If Marginal Cost Is Less Than Average Total Cost, Then

question 155

True/False

If marginal cost is less than average total cost, then average total cost is decreasing.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales, such as rent, insurance, and salaries.

Net Operating Income

Income derived from the main activities of a business, not including interest and tax deductions.

Variable Expenses

Costs that change in proportion to the activity of a business, such as raw materials and direct labor costs.

Fixed Expenses

Costs that do not change with the level of production or sales over a short period, such as rent or salaries.