Asked by Julianna Cianfrocca on Sep 24, 2024
A falling average cost implies that
A) marginal cost is above average cost
B) marginal cost is below average cost
C) marginal cost is equal to average cost
D) none of the above
Average Cost
The total cost of production divided by the number of goods produced, showing the cost of producing each unit.
Marginal Cost
The cost incurred to produce one additional unit of a product or service.
- Clarify the link between marginal cost and average cost, and how it influences the understanding of cost trends.
- Pinpoint the conditions wherein shifts in marginal costs cause average costs to diminish or augment.
Learning Objectives
- Clarify the link between marginal cost and average cost, and how it influences the understanding of cost trends.
- Pinpoint the conditions wherein shifts in marginal costs cause average costs to diminish or augment.