Asked by
Sammy's Mango
on Dec 11, 2024Verified
If the firm's fixed costs double while variable costs are unchanged, then
A) marginal cost more than doubles.
B) marginal cost doubles.
C) marginal cost remains unchanged.
D) average total cost remains unchanged.
E) average variable cost doubles.
Fixed Costs
Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.
Variable Costs
Expenses that change in proportion to the activity of a business, such as materials and labor.
Marginal Cost
The incremental cost involved in creating an extra unit of a product or service.
- Clarify the distinctions between fixed, variable, and comprehensive costs within production contexts.
- Identify implications of changes in fixed and variable costs on overall production costs.
Verified Answer
FL
Learning Objectives
- Clarify the distinctions between fixed, variable, and comprehensive costs within production contexts.
- Identify implications of changes in fixed and variable costs on overall production costs.