Figure 14-1
-Refer to Figure 14-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm must

Question

Figure 14-1 
-Refer to Figure 14-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm must

Quizplus · Accepted Answer

If the marginal cost is lower than the average total cost, producing one more unit would decrease the average cost. If the marginal cost is greater than the average total cost, producing one more unit would increase the average cost. Therefore, the marginal cost curve must lie below the average total cost curve to ensure that the cost of producing additional units does not exceed the average cost. Thus, the best choice is B.

Figure 14-1 -Refer to Figure 14-1.Considering the Relationship Between Average Total Cost