Marginal-Average Rule States That

question 67

Multiple Choice

Marginal-average rule states that:

• A) when marginal cost is above average cost, average cost will fall.
• B) when marginal cost is above average cost, average cost will remain constant.
• C) when marginal cost is below average cost, average cost will fall.
• D) when marginal cost is below average cost, average cost will rise.

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Definitions:

GDP

Gross Domestic Product, the total market value of all goods and services produced within a country in a specific time period, used as a broad measure of overall economic performance.

Personal Disposable Income

The amount of money that individuals have available for spending and saving after income taxes have been accounted for.

Manufacturing Output

The total value or volume of goods and products produced within a manufacturing sector in a specific period.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting fixed versus variable costs.