A firm should increase the quantity of output as long as its marginal revenue is greater than its marginal cost. marginal cost is greater than its marginal revenue. average revenue is greater than its average total cost. average revenue is greater than its average variable cost.

A firm should increase the quantity of output as long as its marginal revenue is greater than its marginal cost. marginal cost is greater than its marginal revenue. average revenue is greater than its average total cost. average revenue is greater than its average variable cost.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section21.4: Costs Of Production: Total, Average, Marginal

Problem 2ST

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Question

A firm should increase the quantity of output as long as its

marginal revenue is greater than its marginal cost.

marginal cost is greater than its marginal revenue.

average revenue is greater than its average total cost.

average revenue is greater than its average variable 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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