If marginal cost is less than average total cost:
A) average total cost is increasing with output.
B) average total cost is decreasing with output.
C) average variable cost is increasing with output.
D) average variable cost is decreasing with output.

Question

Quizplus · Accepted Answer

When marginal cost is less than average total cost, it pulls the average total cost down, causing it to decrease with output.

If Marginal Cost Is Less Than Average Total Cost