If marginal cost is below average cost, marginal cost must be rising.

Name: If marginal cost is below average cost, marginal cost must be rising.
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Question

Quizplus · Accepted Answer

If marginal cost is below average cost, it means the additional cost of producing each unit is less than the average cost of producing all units. This implies that the cost of the earlier units was higher than the marginal cost. Therefore, the marginal cost must be decreasing and not rising.

If Marginal Cost Is Below Average Cost, Marginal Cost Must