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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Average Cost will rise only when Marginal Cost rises.
Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false.
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'D'. Can you explain this answer?
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Direction: In the following questions, a statement of Assertion (A) i...
Average cost rises only when Marginal Cost is greater than Average Cost. Average cost falls as long as marginal cost is below average cost (irrespective of the fact that marginal cost is rising or falling).
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Direction: In the following questions, a statement of Assertion (A) i...
Assertion (A): Average Cost will rise only when Marginal Cost rises.
Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.
The correct answer is option 'D' - Assertion (A) is false, but Reason (R) is true.
Explanation:
Understanding Average Cost (AC) and Marginal Cost (MC):
- Average Cost (AC) is the total cost divided by the number of units produced. It represents the cost per unit of production.
- Marginal Cost (MC) is the additional cost incurred to produce one more unit of output. It represents the change in total cost when one more unit is produced.
Relation between AC and MC:
- When MC is less than AC, it pulls the AC down.
- When MC is greater than AC, it pushes the AC up.
- When MC is equal to AC, the AC remains constant.
Assertion (A): Average Cost will rise only when Marginal Cost rises.
This statement is false. Average Cost can rise even when Marginal Cost remains constant or decreases. The rise in Average Cost occurs when the Marginal Cost is greater than the Average Cost.
Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.
This statement is true. The rise in Average Cost occurs when the Marginal Cost is greater than the Average Cost. It indicates that the last unit produced is more expensive than the previous units. This can happen even if the Marginal Cost does not increase, as long as it is greater than the Average Cost.
Example:
To understand this concept, consider the following scenario:
- Let's say a company produces 100 units at a total cost of $1000, resulting in an Average Cost of $10 per unit (AC = Total Cost / Number of units).
- Now, let's consider the production of an additional unit. If the total cost increases by $15, the Marginal Cost for that unit would be $15.
- In this case, the Marginal Cost ($15) is greater than the Average Cost ($10), causing the Average Cost to rise. The Average Cost would become $1015 / 101 units = $10.05 per unit.
Therefore, it is clear that Assertion (A) is false, but Reason (R) is true. The rise in Average Cost does not solely depend on the rise in Marginal Cost, but rather on whether the Marginal Cost is greater than the Average Cost.
Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.
The correct answer is option 'D' - Assertion (A) is false, but Reason (R) is true.
Explanation:
Understanding Average Cost (AC) and Marginal Cost (MC):
- Average Cost (AC) is the total cost divided by the number of units produced. It represents the cost per unit of production.
- Marginal Cost (MC) is the additional cost incurred to produce one more unit of output. It represents the change in total cost when one more unit is produced.
Relation between AC and MC:
- When MC is less than AC, it pulls the AC down.
- When MC is greater than AC, it pushes the AC up.
- When MC is equal to AC, the AC remains constant.
Assertion (A): Average Cost will rise only when Marginal Cost rises.
This statement is false. Average Cost can rise even when Marginal Cost remains constant or decreases. The rise in Average Cost occurs when the Marginal Cost is greater than the Average Cost.
Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.
This statement is true. The rise in Average Cost occurs when the Marginal Cost is greater than the Average Cost. It indicates that the last unit produced is more expensive than the previous units. This can happen even if the Marginal Cost does not increase, as long as it is greater than the Average Cost.
Example:
To understand this concept, consider the following scenario:
- Let's say a company produces 100 units at a total cost of $1000, resulting in an Average Cost of $10 per unit (AC = Total Cost / Number of units).
- Now, let's consider the production of an additional unit. If the total cost increases by $15, the Marginal Cost for that unit would be $15.
- In this case, the Marginal Cost ($15) is greater than the Average Cost ($10), causing the Average Cost to rise. The Average Cost would become $1015 / 101 units = $10.05 per unit.
Therefore, it is clear that Assertion (A) is false, but Reason (R) is true. The rise in Average Cost does not solely depend on the rise in Marginal Cost, but rather on whether the Marginal Cost is greater than the Average Cost.
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Solutions for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Average Cost will rise only when Marginal Cost rises.Reason (R): Rise in AC takes place when MC is greater than AC and not necessarily when MC rises.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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