As long as marginal cost is below average cost,average cost will be
A)falling
B)rising.
C)constant.
D)changing in a direction that cannot be determined without more information

Question

Quizplus · Accepted Answer

When marginal cost is below average cost, it means that the cost of producing an additional unit is lower than the average cost of all units produced so far. This lowers the overall average cost per unit, thus causing it to fall. Therefore, the correct choice is A) falling.

As Long as Marginal Cost Is Below Average Cost,average Cost