If a firm increases its output and finds that its average total cost decreases as a result, this implies that
A) marginal cost exceeds average total cost.
B) the cost of producing an additional unit of output is more than the average total cost.
C) average fixed cost is increasing.
D) average total cost exceeds marginal cost.

Question

Quizplus · Accepted Answer

When average total cost decreases as output increases, it implies that marginal cost is less than average total cost.

If a Firm Increases Its Output and Finds That Its