Asked by Praveeni Sooriyamudali on Jul 14, 2024
Verified
If Marginal Cost (MC) is higher than Average Cost (AC) ,average cost is
A) falling
B) rising
C) constant
D) none of the above
Marginal Cost
The cost incurred by producing one additional unit of a product, reflecting how costs change with production volume adjustments.
Average Cost
The total cost of production divided by the number of units produced, a calculation used to determine the cost efficiency of producing goods or services.
- Calculate and interpret average, marginal, and total costs.
Verified Answer
MM
marissa marianoJul 15, 2024
Final Answer :
B
Explanation :
If MC is higher than AC, it means that the cost of producing an additional unit is higher than the average cost of producing all units. This indicates that the average cost is increasing, therefore, the best choice is option B, rising.
Learning Objectives
- Calculate and interpret average, marginal, and total costs.