The average total cost curve will be downward sloping whenever:
A) average fixed cost is greater than average variable cost
B) marginal cost is smaller than average total cost
C) marginal costs are decreasing
D) average variable cost is increasing

Question

Quizplus · Accepted Answer

When marginal cost is smaller than average total cost, the average total cost curve is downward sloping because the addition of one more unit costs less than the average, thus pulling the average down.

The Average Total Cost Curve Will Be Downward Sloping Whenever