In the short run, suppose average total cost is a straight line and marginal cost is positive and constant. Then, we know that:
A) marginal cost is less than average total cost.
B) average total cost is positive and constant.
C) average total cost equals marginal cost.
D) A and B are correct.
E) B and C are correct.

Question

Quizplus · Accepted Answer

If average total cost is a straight line, it implies it is constant. Since marginal cost is positive and constant, average total cost must equal marginal cost for it to remain constant.

In the Short Run, Suppose Average Total Cost Is a Straight