Asked by
Greyson North
on Dec 11, 2024Verified
If a firm's average total costs fall as it produces a larger output,
A) average variable cost must also decline as output expands.
B) marginal cost must also decline as output expands.
C) average fixed cost must be less than average variable costs.
D) marginal cost must be less than average total cost.
Average Total Costs
The cost of producing each unit, calculated by dividing the entire production cost by the total number of units made.
Marginal Cost
The increase in cost that arises from producing one additional unit of a good or service.
Output
The quantity of goods or services produced in a given time period by a firm, industry, or country.
- Investigate the consequences of altering production volumes on marginal and average costs, as well as their mutual relationships.
Verified Answer
NL
Learning Objectives
- Investigate the consequences of altering production volumes on marginal and average costs, as well as their mutual relationships.