If marginal cost is less than average total cost, for a higher output level: a. both average...
Question:
If marginal cost is less than average total cost, for a higher output level:
a. both average total cost and average variable cost must be falling.
b. average total cost must be falling, but the average variable cost may be rising, or falling.
c. marginal cost must be falling.
d. the difference between average variable cost and average total cost be rising or falling.
Marginal cost
Whenever a company produces one extra unit of a product that the company incurs different types of expenses for producing it, and the summation of those expenses for producing that extra unit is the marginal cost.
Answer and Explanation: 1
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View this answerOption B (average total cost must be falling, but the average variable cost may be rising, or falling.) is correct.
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When MC is below...
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Average Cost Vs. Total Cost: Making Production Decisions in the Short-Run
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Chapter 4 / Lesson 8
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Learn what the average cost of a firm is and how it differs from total cost. Understand the distinction between short run and long run average total cost.
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