If Price Is Greater Than Marginal Cost for the Last

question 25

Multiple Choice

If price is greater than marginal cost for the last unit produced:

• A) Profit is increasing.
• B) Profit is decreasing.
• C) Only economic costs are being covered.
• D) Average total cost is covereD.

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Definitions:

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced from a fixed set of resources.

Bowed Outward

A description of a production possibility frontier that demonstrates the increasing opportunity cost of producing one good over another.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest in one option over others.

Rectangles

A four-sided flat shape where every angle is a right angle and opposite sides are parallel and equal in length.