If marginal cost exceeds average total cost:
A) average total cost decreases as output increases.
B) average fixed cost increases as output increases.
C) average variable cost increases as output increases.
D) average variable cost decreases as output increases.

Question

Quizplus · Accepted Answer

When marginal cost is greater than average total cost, it pulls the average total cost up, indicating that average variable cost also increases as output increases.

If Marginal Cost Exceeds Average Total Cost