Asked by Matthew Eskender on May 28, 2024
Verified
When average costs are increasing, marginal costs are greater than average costs.
Average Costs
Average costs refer to the total cost of production divided by the number of units produced, indicating the cost of producing each unit.
Marginal Costs
The cost added by producing one additional unit of a product or service.
- Examine the relationship between cost principles such as marginal cost and average cost, and their correlation with the level of output.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
True
Explanation :
When average costs are increasing, it means that the cost of producing an additional unit (marginal cost) is higher than the cost of producing the average unit so far, thus pushing the average costs up.
Learning Objectives
- Examine the relationship between cost principles such as marginal cost and average cost, and their correlation with the level of output.