If the marginal cost of producing the next unit of output exceeds the average total cost, then
A) the average total cost curve is increasing.
B) the marginal cost curve is at its minimum.
C) the average total cost curve is decreasing.
D) the average total cost curve is at its minimum.

Question

Quizplus · Accepted Answer

If the marginal cost of producing the next unit of output exceeds the average total cost, it means that the average total cost is increasing. This is because the marginal cost is the cost of producing an additional unit, which may be higher due to diminishing returns. As a result, the average total cost curve will be pulled upward.

If the Marginal Cost of Producing the Next Unit of Output