Whenever average cost exceeds marginal cost,
A)average cost is rising.
B)average cost is falling.
C)marginal cost is rising.
D)marginal cost is falling.

Question

Quizplus · Accepted Answer

When average cost exceeds marginal cost, it means that the cost of producing one more unit is less than the average cost of production up to that point. This situation leads to a decrease in the average cost as more units are produced, indicating that average cost is falling.

Whenever Average Cost Exceeds Marginal Cost