Asked by Chelsy Martin on Jun 18, 2024
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The following relationship must hold between the average total cost (ATC) curve and the marginal cost curve (MC) :
A) If MC is rising, ATC must be rising.
B) If MC is rising, ATC must be greater than MC.
C) If MC is rising, ATC must be less than MC.
D) If ATC is rising, MC must be greater than ATC.
E) If ATC is rising, MC must be less than ATC.
Average Total Cost
The total cost of production (fixed and variable costs combined) divided by the total output, indicating the average cost per unit of output.
Marginal Cost Curve
A graphical representation showing how the cost to produce one additional unit changes with the level of production.
Rising
Often refers to the increase in value, quantity, or level of something over time, frequently used in the context of prices, temperatures, or other measurable factors.
- Perceive the connection between marginal, average, and total costs in several production landscapes.
- Comprehend how the structure of cost curves relates to firm decisions in both the short run and long run.
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Learning Objectives
- Perceive the connection between marginal, average, and total costs in several production landscapes.
- Comprehend how the structure of cost curves relates to firm decisions in both the short run and long run.
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