The marginal cost curve can rise even if the average total cost is falling.

Question

Quizplus · Accepted Answer

Marginal cost (MC) is the additional cost incurred for producing one more unit of output, while average total cost (ATC) is the total cost divided by the total output. Therefore, it is possible for the marginal cost curve to rise even if the average total cost is falling. This happens when the marginal cost of producing each additional unit is higher than the average cost of all units produced up until that point. In other words, the additional inputs required to produce one more unit may be more expensive than the inputs used to produce the previous units, causing the marginal cost to increase.

The Marginal Cost Curve Can Rise Even If the Average