If the marginal cost is lower than the average cost, the average cost is falling.

Name: If the marginal cost is lower than the average cost, the average cost is falling.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the marginal cost is lower than the average cost, it means that producing an additional unit of output is cheaper than the average cost of production, resulting in a downward pull on the average cost curve. Therefore, the average cost is falling.

If the Marginal Cost Is Lower Than the Average Cost