Asked by
J.G.N. Vogelzang
on Nov 30, 2024
Verified
Statement I: Average fixed cost at an output of 4 is double average fixed cost at an output of 8.
Statement II: If average variable cost is rising,average total cost may be falling.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Average Fixed Cost
The fixed costs of production divided by the quantity of output produced, typically decreasing as production increases.
Average Variable Cost
The total variable costs of production divided by the quantity of output produced, indicating the cost of producing one more unit of a good or service.
- Acquire an understanding of the correlation between average total cost (ATC), marginal cost (MC), and average variable cost (AVC).
- Comprehend the importance of economies of scale and their impact on cost reduction.
Verified Answer
EA
Learning Objectives
- Acquire an understanding of the correlation between average total cost (ATC), marginal cost (MC), and average variable cost (AVC).
- Comprehend the importance of economies of scale and their impact on cost reduction.