If Fixed Costs Do Not Change, Then Marginal Cost

question 204

Multiple Choice

If fixed costs do not change, then marginal cost

• A)also remains constant.
• B)equals the change in variable cost divided by the change in output.
• C)equals the change in average variable cost divided by the change in output.
• D)equals the change in average fixed cost divided by the change in output.

---

Definitions:

Underallocation of Resources

A situation where resources are not being used efficiently or optimally, resulting in missed opportunities for economic or social benefits.

Monopolistic Competition

A market structure in which many companies sell products or services that are similar but not identical, allowing for some degree of market power.

Profit-maximizing

The approach by which an organization figures out the best pricing and output quantity for the highest profit.

Product Variety

The assortment of different products or services offered by a company or available in a market.