If marginal cost is less than average variable cost,
A)average variable cost is falling.
B)average variable cost is constant.
C)average variable cost is rising.
D)there is no way to determine if average variable cost is falling,constant,or rising.

Question

Quizplus · Accepted Answer

When marginal cost is less than average variable cost, it means that the cost of producing one more unit is lower than the average cost of producing all units so far. This suggests that as more units are produced, the average variable cost is falling.

If Marginal Cost Is Less Than Average Variable Cost