Which of the following statements are true? When marginal cost exceeds average total cost:
(i) average total cost must be rising
(ii) average variable cost must be rising
(iii) average fixed cost must be rising
A)(i) only
B)(i) and (ii)
C)(ii) and (iii)
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

When marginal cost exceeds average total cost, average total cost is rising. Since average total cost is the sum of average variable cost and average fixed cost, and average fixed cost always decreases as output increases, average variable cost must also be rising.

Which of the Following Statements Are True? When Marginal Cost