Which of the following statements best describes the relationship between average total cost and marginal cost?
A) If average total cost exceeds marginal cost, then average total cost is decreasing.
B) If average total cost is less than marginal cost, then average total cost is constant.
C) If average total cost exceeds marginal cost, then average total cost is increasing.
D) If average total cost is less than marginal cost, then average total cost is decreasing.

Question

Quizplus · Accepted Answer

When marginal cost is below average total cost, it pulls the average total cost down, indicating that average total cost is decreasing. This is because the additional unit costs less than the average of all previous units, thus lowering the overall average.

Which of the Following Statements Best Describes the Relationship Between