If the short-run average total cost curve is declining, what can we conclude about the marginal cost?
A) Marginal cost is greater than average total cost.
B) Marginal cost is less than average total cost.
C) Marginal cost is less than average variable cost.
D) Marginal cost equals average total cost.

Question

Quizplus · Accepted Answer

When the short-run average total cost (ATC) curve is declining, it means that the addition of one more unit of production is costing less than the previous average, indicating that the marginal cost (MC) is less than the average total cost.

If the Short-Run Average Total Cost Curve Is Declining, What