When average cost decreases as output increases, Group of answer choices marginal cost is below average cost average variable cost is rising average fixed cost is rising marginal cost is above average cost

When average cost decreases as output increases, Group of answer choices marginal cost is below average cost average variable cost is rising average fixed cost is rising marginal cost is above average cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

When average cost decreases as output increases,

Group of answer choices

marginal cost is below average cost

average variable cost is rising

average fixed cost is rising

marginal cost is above average cost

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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