Which of the Following Statements Is True? If the Marginal

question 124

Multiple Choice

Which of the following statements is true? If the marginal product of labor diminishes,

• A)average fixed cost rises
• B)average variable cost is constant
• C)marginal cost rises
• D)average total cost must rise
• E)total cost rises at a diminishing rate

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Definitions:

Variable Cost

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

Average Fixed Cost

The constant expenses associated with production, when divided by the volume of goods produced, reduce as the production volume goes up.

Instructional Modules

Structured units designed to provide education on a particular topic, often part of a larger course or curriculum.

Fixed Cost

Costs that do not vary with the level of output or production, such as rent or salaries.