Question

Which one of the following statements is false?

a) total variable cost plus total fixed cost equals total cost.
b) marginal cost equals the change in total cost divided by the change in output.
c) average total cost is calculated by dividing total cost by the level of output.
d) the average cost curve is u-shaped. e) the total cost curve is u-shaped.

Answer 1

The false statement is d) the average cost curve is u-shaped.

Step-by-step explanation:

The false statement among the options provided is d) the average cost curve is u-shaped.

The average cost curve is different from the average total cost (ATC) curve. The ATC curve is U-shaped, but the average cost curve does not have a specific shape. The average cost curve represents the average cost per unit produced, while the ATC curve represents the average total cost per unit produced.

For example, if the total cost is $100 and the quantity produced is 10 units, the average total cost would be $10 per unit. However, the average cost per unit may vary depending on factors like fixed costs.