If marginal cost is LESS than average total cost,then _____ cost is _____.
A)average total;increasing
B)average total;decreasing
C)marginal;necessarily increasing
D)marginal;necessarily decreasing

Question

Quizplus · Accepted Answer

When the marginal cost is less than the average total cost, it means that the additional unit of production is adding less to the total cost than the average cost of all units. This situation indicates that the average cost will decrease with the production of an additional unit, causing the average total cost to decrease. Therefore, the correct choice is option B, where the average total cost is decreasing.

If Marginal Cost Is LESS Than Average Total Cost,then _____