Describe the Relationship Between Average Variable Cost and Marginal Cost

question 204

Essay

Describe the relationship between average variable cost and marginal cost.

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Definitions:

Cash Dividends

Cash distributed by a corporation to its shareholders out of its earnings.

Net Cash

The amount of cash that remains after accounting for cash disbursements and receipts, indicating a company's liquidity position.

Operating Activities

Activities that constitute the primary or main activities of a business, like sales, provision of services, production, etc., which are reflected in the cash flow from operating activities in the financial statements.

Net Income

The amount of money a company earns after deducting all its expenses, taxes, and costs from its total revenue.