When average total cost is decreasing as output expands, what can we conclude?
A) that total fixed costs must be increasing
B) that average variable cost must be falling
C) that average fixed cost must be increasing
D) that marginal cost must be less than average total cost

Question

Quizplus · Accepted Answer

When average total cost is decreasing, it means that the additional unit of output is being produced at a lower cost than the average of all units produced so far, indicating that marginal cost is less than average total cost.

When Average Total Cost Is Decreasing as Output Expands, What