When the marginal cost curve is below the average total cost curve,the average total cost curve must be falling.

Question

Quizplus · Accepted Answer

When the marginal cost curve is less than the average total cost curve, it means that the cost of producing each additional unit is less than the average cost of producing all units. As a result, the addition of each unit will decrease the average cost, causing the average total cost curve to fall.

When the Marginal Cost Curve Is Below the Average Total