When average total cost decreases,
A)marginal cost must be decreasing.
B)marginal cost must be increasing.
C)average variable cost must be decreasing.
D)average variable cost must be increasing.
E)marginal cost and average variable cost can be increasing or decreasing.

Question

Quizplus · Accepted Answer

When average total cost decreases, it means that the cost of producing an additional unit is less than the average cost up to that point, which can lead to both marginal cost and average variable cost either increasing or decreasing, depending on the specific circumstances of production and cost structure.

When Average Total Cost Decreases