How Marginal Costs Differ from Average & Total Costs

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

If a company is trying to expand operations, which of the following matters most?

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1. If a company is trying to determine a fair price for its goods, which of the following matters the most?

2. If a company is trying to determine whether or not to enter a new sector, which of the following is most important?

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About This Quiz & Worksheet

This quiz/worksheet combination will check your understanding of marginal costs and average total costs. Assessments items will require you distinguish between these two types of costs and others mentioned in the lesson.

Quiz & Worksheet Goals

  • Type of costs to consider when expanding operations
  • Factors that change marginal costs
  • Reasons why marginal cost is a bad indicator for price

Skills Practiced

  • Information Recall - access the knowledge you've gained regarding the type of cost that matters most when determining a fair price for goods
  • Interpreting Information - verify that you can read information regarding the different types of costs and interpret it accurately
  • Knowledge Application - use your knowledge to answer questions about which type of cost is most important when deciding if a company should or should not enter a new sector

Additional Learning

Learn the differences between marginal costs and average total costs by reviewing the lesson, How Marginal Costs Differ from Average & Total Costs. Objectives covered include:

  • Differentiate the different types of costs
  • Understand how the different types of costs are used
  • Review the usefulness of the types of costs to businesses
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