If marginal cost is greater than average total cost, then
A)profits are increasing.
B)economies of scale are becoming greater.
C)average total cost remains constant.
D)average total cost is increasing.

Question

Quizplus · Accepted Answer

If marginal cost is greater than average total cost, it means that each additional unit produced is adding more to the total cost than the average cost of all the units produced so far. This suggests that the average cost of producing each unit is increasing, which is reflected in the increasing average total cost. Therefore, the correct answer is D.

If Marginal Cost Is Greater Than Average Total Cost, Then