At what level of output will average total cost increase?
a. when marginal cost is greater than average total cost
b. when marginal cost is lower than average variable cost
c. when marginal cost equals average variable cost
d. when marginal cost equals average total cost
Ans: a. when marginal cost is greater than average total cost
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At the break-even point for the consumption function
A) saving is positive. B) saving is zero. C) saving is negative. D) the marginal propensity to consume equals l.
Other things being equal, a reduction in taxes will
A) lead to a corresponding reduction in interest rates increasing the crowding out effect. B) influence the short run aggregate supply curve but not the aggregate demand curve. C) cause an increase in aggregate demand due to increases in consumption, investment, or net exports. D) lead to a reduction in the long run aggregate supply curve as businesses enjoy greater profits.