Whenever marginal cost is greater than the average total cost:
A) marginal cost is falling.
B) average cost is falling.
C) average cost is constant.
D) average cost is rising.

Question

Quizplus · Accepted Answer

If marginal cost is greater than average total cost, it means that the average total cost is increasing. This is because as marginal cost increases, it pulls up the average total cost. Therefore, the correct choice is D, which says that the average cost is rising.

Whenever Marginal Cost Is Greater Than the Average Total Cost