At the current level of output,Becca Furniture's marginal cost curve is above the average total cost curve.This means Becca Furniture's average total cost curve:
A)must be rising.
B)must be flat.
C)must be falling.
D)may be rising,falling,or flat depending on other things.

Question

Quizplus · Accepted Answer

If the marginal cost curve is above the average total cost curve, it means the additional cost of producing one more unit is higher than the average cost of producing all units. This would pull up the average cost curve and cause it to rise. Therefore, the best choice is A.

At the Current Level of Output,Becca Furniture's Marginal Cost Curve