Which of the Following Statements Is Correct

question 65

Multiple Choice

Which of the following statements is correct?

• A) Average variable costs always exceed average total costs.
• B) Average fixed costs are constant.
• C) Average variable cost reaches its minimum when average product equals its maximum.
• D) Average fixed costs are always less than average variable costs.

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Definitions:

Resources

Assets, materials, and inputs needed to produce goods and services.

Overallocated

A situation where resources are disproportionately distributed or excessively committed to a particular project or area, potentially leading to inefficiencies.

Production

Production is the process of creating goods or services through the combination of labor, materials, and technology to meet consumer demand.

Marginal Social Cost

The cost to society of producing one additional unit of a good, including both the cost to the producer and any costs to others from that production.