A Linear Total Cost Curve Which Passes Through the Origin

question 19

Multiple Choice

A linear total cost curve which passes through the origin implies that

• A)average cost is constant and marginal cost is variable.
• B)average cost is variable and marginal cost is constant.
• C)average and marginal costs are constant and equal.
• D)We need more information to answer question.

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Definitions:

Market Value

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller.

Par Value

The face value of a bond or stock as stated on the certificate or charter, often used for legal capital or accounting purposes.

Cash

A form of currency that includes coins and paper notes, which is used as a medium of exchange for goods and services.

Shares

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.