If average variable cost of production falls as output grows
A)marginal cost must also be declining.
B)fixed cost must also be declining.
C)total cost must also be declining.
D)marginal cost must be below average variable cost.

Question

Quizplus · Accepted Answer

When average variable cost (AVC) is falling, it means the additional unit of output is being produced at a lower cost than the average of all previous units, indicating that marginal cost (MC) is below the AVC.

If Average Variable Cost of Production Falls as Output Grows