When marginal cost exceeds average total cost,what do we know
A)Average fixed cost must be rising.
B)Average total cost must be rising.
C)Average total cost must be falling.
D)Marginal cost must be falling.

Question

Quizplus · Accepted Answer

When marginal cost exceeds average total cost, it means that the cost of producing one additional unit is higher than the average cost per unit. This indicates that the average cost per unit is increasing, which is reflected in the rising trend of average total cost. Therefore, option B is correct. Option A is incorrect because the statement does not provide any information about average fixed cost. Option C is incorrect because, as stated earlier, marginal cost exceeding average total cost implies that average total cost is increasing. Option D is incorrect because the statement implies that marginal cost is increasing.

When Marginal Cost Exceeds Average Total Cost,what Do We Know