At an output at which ATC is greater than MC
A) the ATC curve is downward sloping.
B) the ATC curve is upward sloping.
C) the AFC curve is upward sloping.
D) the AVC curve is upward sloping.

Question

Quizplus · Accepted Answer

When ATC (Average Total Cost) is greater than MC (Marginal Cost), it indicates that the ATC curve is downward sloping. This is because, at outputs where MC is below ATC, each additional unit produced and sold at a cost lower than the average pulls the average cost down, hence the downward slope.

At an Output at Which ATC Is Greater Than MC