The average total cost (ATC) curve will be negatively sloped so long as
A) Average variable cost is less than average total cost.
B) Marginal cost is greater than average total cost.
C) Average fixed cost is less than average total cost.
D) Marginal cost is less than average total cost.

Question

Quizplus · Accepted Answer

The ATC curve will be negatively sloped (decreasing) when the marginal cost (MC) is less than the average total cost (ATC) because the addition of one more unit costs less than the average, thus pulling the average down.

The Average Total Cost (ATC) Curve Will Be Negatively Sloped