Which of the following statements about a firm’s cost structure
are correct?
(a) Average cost measures the...
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Economics
Which of the following statements about a firm’s cost structureare correct?
(a) Average cost measures the firm’s cost of producing oneadditional unit.
(b) Both average costs and average variable costs are alwaysupward sloping.
(c) If marginal cost is above average cost, then average cost isincreasing
Answer & Explanation
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c If marginal cost is above average cost then average cost is increasing It is the Marginal cost which is the cost of producing one additional unit and not Average costTherefore a is
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