Which of the following statements is not correct?
A)The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units.
B)The total variable cost of seven units equals the average variable cost of seven units times seven.
C)If marginal cost is rising, then average variable cost must be rising.
D)The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units.

Question

Quizplus · Accepted Answer

This statement is not always true. While it is possible for average variable cost to rise as marginal cost increases, there may be situations where average variable cost decreases even as marginal cost increases, depending on the specific cost structure of the firm. Therefore, statement C cannot be universally applied.

Which of the Following Statements Is Not Correct