Asked by Mehria Musaddiq on Sep 23, 2024
Which of the following statements is TRUE?
A) Average cost (AC) is irrelevant to extent decisions
B) Average cost determines how much you produce
C) Marginal cost (MC) is irrelevant to extent decisions
D) All of the above
Average Cost
The total cost of production divided by the number of goods produced, representing the cost per unit of output.
Marginal Cost
The financial outlay for creating one further unit of a good or service.
Extent Decisions
Decisions related to the scale or scope of an operation or project, often involving considerations of expansion or reduction.
- Assess the effect of marginal costs and revenues on the choices made in production processes.
Learning Objectives
- Assess the effect of marginal costs and revenues on the choices made in production processes.
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