If an increase in output results in a DECREASE in average total cost,the corresponding marginal cost is:
A)less than average total cost.
B)greater than average total cost.
C)equal to average total cost.
D)negative.

Question

Quizplus · Accepted Answer

If an increase in output results in a decrease in average total cost, it means that the marginal cost is less than the average total cost. This is because if the marginal cost were greater than the average total cost, then an increase in output would lead to an increase in average total cost, not a decrease. Therefore, the correct answer is A, less than average total cost.

If an Increase in Output Results in a DECREASE in Average