Which of the following is true of the relationship between the marginal cost function and the average total cost and average variable cost functions?
A)If MC is greater than ATC and AVC, then ATC and AVC will increase.
B)The ATC and AVC curves intersect the MC curve at minimum MC.
C)The MC curve, ATC curve, and AVC curve all intersect at the same point.
D)At each level of output, MC is equal to difference between AVC and ATC.

Question

Quizplus · Accepted Answer

When the marginal cost (MC) is greater than both the average total cost (ATC) and the average variable cost (AVC), it means the cost of producing an additional unit is higher than the current average costs. This will pull the averages up, causing both ATC and AVC to increase.

Which of the Following Is True of the Relationship Between