Which of the Following Statements Is FALSE

question 113

Multiple Choice

Which of the following statements is FALSE?

• A) AC = TC/Q
• B) A firm that produces 100 units at a total cost of $500 has an average cost of $5 per unit.
• C) Firms will earn positive profits if price exceeds average cost.
• D) When marginal cost is below average cost, average cost is rising.

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Definitions:

Marginal Cost

The amount spent to manufacture one more unit of a product or service.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell.

Upsloping

A description for a curve or a line on a graph that shows a positive relationship between two variables, indicating that as one variable increases, the other also increases.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period.