Which of the following statements regarding the relationship between average cost and marginal cost is not true?
A)When marginal cost is below average total cost,average total cost falls.
B)When marginal cost is above average variable cost,average variable cost rises.
C)When marginal cost is equal to average total cost,average total cost is minimized.
D)When marginal cost is above average fixed cost,average fixed cost rises.

Question

Quizplus · Accepted Answer

When marginal cost is above average fixed cost, it does not result in a rise in average fixed cost. Average fixed cost is calculated by dividing fixed cost by output, which means that it does not change with changes in output or marginal cost. Therefore, option D is the statement that is not true.

Which of the Following Statements Regarding the Relationship Between Average