If Marginal Cost Is Greater Than Average Total Cost Then

question 42

Multiple Choice

If marginal cost is greater than average total cost then

• A)profits are increasing
• B)economies of scale are becoming greater
• C)average total cost remains constant
• D)average total cost is increasing
• E)average total cost is decreasing

---

Definitions:

Price Ceiling

A government-imposed limit on the price charged for a product, aimed at keeping prices from rising too high.

Quantity Demanded

The amount of a good or service consumers are willing and able to purchase at a given price.

Quantity Supplied

Quantity Supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price, directly influenced by the price level, among other factors.

Inferior Good

A type of good whose demand decreases when the income of consumers increases, opposite to normal goods.