Asked by
Gabriela Magana
on Nov 04, 2024
Verified
If marginal cost is above average total cost, average total cost will
A) be minimized.
B) decrease.
C) increase.
D) remain constant.
Marginal Cost
The financial outlay required to create another unit of a good or service.
Average Total Cost
The total cost of production (fixed plus variable costs) divided by the number of goods produced, essentially the per unit production cost.
- Examine the behavior of cost curves (MC, AVC, AFC, TC, ATC) and their interrelationships during short-term production.
- Determine the location where the curve of marginal cost crosses the curves of average total cost and average variable cost, and comprehend the importance of these intersection points.
Verified Answer
DG
Learning Objectives
- Examine the behavior of cost curves (MC, AVC, AFC, TC, ATC) and their interrelationships during short-term production.
- Determine the location where the curve of marginal cost crosses the curves of average total cost and average variable cost, and comprehend the importance of these intersection points.