Use the following to answer questions:
-(Table: Cost Data) Look at the table Cost Data. When the purse factory produces 5 units of output (purses):
A) marginal cost is above average total cost, and average total cost is rising.
B) average total cost is above average variable cost, and average variable cost is falling.
C) marginal cost is below average variable cost, and average variable cost is falling.
D) marginal cost is above average variable cost and below average total cost, and average total cost is rising.

Question

Use the following to answer questions: 
-(Table: Cost Data) Look at the table Cost Data. When the purse factory produces 5 units of output (purses):
A) marginal cost is above average total cost, and average total cost is rising. 
B) average total cost is above average variable cost, and average variable cost is falling. 
C) marginal cost is below average variable cost, and average variable cost is falling. 
D) marginal cost is above average variable cost and below average total cost, and average total cost is rising.

Quizplus · Accepted Answer

When marginal cost is above average total cost, it pulls the average total cost up, indicating that average total cost is rising.

Use the Following to Answer Questions