If marginal cost is greater than average total cost, then:
A)average total cost is at its maximum.
B)average total cost is at its minimum.
C)average total cost is increasing.
D)average total cost is decreasing.

Question

Quizplus · Accepted Answer

When marginal cost is greater than average total cost, it means that the average total cost is increasing. This is because the cost of producing an additional unit (marginal cost) is more than the average cost of all units produced so far (average total cost). As a result, the average cost per unit increases.

If Marginal Cost Is Greater Than Average Total Cost, Then