Where marginal cost is less than average cost,
A) opportunity cost must have been excluded from the calculation of marginal cost.
B) marginal cost must be falling.
C) marginal cost must be rising.
D) marginal cost may be rising, falling, or constant.

Question

Quizplus · Accepted Answer

When marginal cost is less than average cost, it indicates that the average cost is decreasing. However, this does not specify the behavior of marginal cost, which could be rising, falling, or constant.

Where Marginal Cost Is Less Than Average Cost