If marginal cost is GREATER than average total cost:
A)average total cost is increasing.
B)average total cost is decreasing.
C)average total cost is unchanged.
D)marginal cost is decreasing.

Question

Quizplus · Accepted Answer

If marginal cost is greater than average total cost, it means the cost of producing one additional unit is higher than the average cost of all units produced. This will cause the average total cost to increase as more units are produced. Therefore, the correct answer is A, average total cost is increasing.

If Marginal Cost Is GREATER Than Average Total Cost