Which of the Following Statements Is True

question 16

Multiple Choice

Which of the following statements is true?

• A)If the marginal product of labor diminishes, the average fixed cost rises.
• B)If the marginal product of labor diminishes, the average variable cost is constant.
• C)If the marginal product of labor diminishes, the marginal cost falls.
• D)If the marginal product of labor diminishes, the average total cost rises.
• E)If the marginal product of labor diminishes, the total cost rises at a diminishing rate.

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Definitions:

Income Tax Expense

The total amount of income tax a company is required to pay to the government, reflected as an expense in its income statement.

Deferred Tax Asset Valuation Allowance

A contra-asset account used to decrease the value of deferred tax assets if it is more likely than not they will not be realized.

Income Manipulation

The practice of adjusting financial statements with the intention to mislead stakeholders about the company's financial performance or health.