Average Variable Costs

question 55

Multiple Choice

Average variable costs

• A)remain the same as production decreases.
• B)remain the same as production increases.
• C)remain the same no matter if production increases or decreases.
• D)go down as production decreases.

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Definitions:

Demand for Y

The desire and willingness of consumers to purchase a specific quantity of a good 'Y' at various prices during a certain period.

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods based on the level of satisfaction (utility) they provide.

Consumption

The action of using up a resource or goods and services being used by consumers.

Saving

The portion of income not spent on current consumption but reserved for future use.