Which of the following is true of the relationship between average and marginal costs?
A)If the marginal cost is greater than the average cost, the average cost is increasing.
B)If the marginal cost is greater than the average cost, the average cost is decreasing
C)If the marginal cost is greater than the average cost, the marginal cost is increasing
D)If the marginal cost is greater than the average cost, the marginal cost is decreasing
E)If the marginal cost is greater than the average cost, the total cost is decreasing

Question

Which of the following is true of the relationship between average and marginal costs?​
A)If the marginal cost is greater than the average cost, the average cost is increasing.
B)If the marginal cost is greater than the average cost, the average cost is decreasing​
C)If the marginal cost is greater than the average cost, the marginal cost is increasing​
D)If the marginal cost is greater than the average cost, the marginal cost is decreasing​
E)If the marginal cost is greater than the average cost, the total cost is decreasing​

Quizplus · Accepted Answer

When the marginal cost is greater than the average cost, it implies that the additional unit of output is more expensive to produce than the previous units. This tends to increase the average cost, as the cost per unit of output increases. Therefore, if the marginal cost is greater than the average cost, the average cost is increasing.

Which of the Following Is True of the Relationship Between