If marginal cost is less than average total cost,
A)marginal cost must be falling
B)average total cost must be increasing
C)average variable cost equals average total cost
D)average variable cost must be decreasing
E)average variable cost may be increasing or decreasing

Question

Quizplus · Accepted Answer

When marginal cost is less than average total cost, average total cost is decreasing. However, average variable cost can either be increasing or decreasing depending on the behavior of fixed costs and the level of output.

If Marginal Cost Is Less Than Average Total Cost