When is average total cost increasing
A)whenever total cost is increasing
B)whenever marginal cost is increasing
C)whenever marginal cost is less than average total cost
D)whenever marginal cost is greater than average total cost

Question

Quizplus · Accepted Answer

Average total cost is increasing whenever the marginal cost is greater than the average total cost. This is because the average total cost includes both the fixed and variable costs, which means that the more units produced, the greater the fixed costs are spread out. However, when the marginal cost is greater than the average total cost, it indicates that each additional unit of production is becoming more expensive than the previous unit, which causes the average total cost to increase.

When Is Average Total Cost Increasing