If Marginal Cost Is Increasing Then

question 25

Multiple Choice

If marginal cost is increasing then:

• A)marginal product must be increasing.
• B)average variable cost must be increasing.
• C)average total cost must be increasing.
• D)average variable cost must be decreasing.
• E)none of the above must necessarily be true.

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Definitions:

Contribution Format

A statement or report format, primarily used in managerial accounting, that separates fixed and variable costs to evaluate the performance of a profit center.

Variable Expenses

Costs that change in proportion to the level of activity or production volume.

Break-Even Sales

The amount of revenue needed to cover all fixed and variable costs, resulting in a net income of zero.

Retail Division

A segment of a company that directly sells products to consumers, typically involving activities and costs related to retail operations.