If marginal cost exceeds average total cost in the short run, then which is likely to be true?

A) Average total cost is increasing.

B) Average variable cost is decreasing.

C) Average total cost is less than average variable cost.

D) Marginal cost is less than average variable cost.

Question

Business

Barnaby

26 September, 19:49

If marginal cost exceeds average total cost in the short run, then which is likely to be true?

A) Average total cost is increasing.

B) Average variable cost is decreasing.

C) Average total cost is less than average variable cost.

D) Marginal cost is less than average variable cost.

+3

Answers (1)

Know the Answer?

Montgomery · Answer 1

A. Average Total Cost is increasing

Explanation:

Average Total Cost is the Total Cost per unit of Output. Marginal Cost is the addition to total cost while producing additional unit of capital

Relationship between AC & MC is as such : MC > AC, AC increases MC < AC, AC decreases MC = AC, AC is minimum

If marginal cost exceeds average total cost in the short run, then which is likely to be true?A) Average total cost is increasing.B) Average variable cost is decreasing.C) Average total cost is less than average variable cost.D) Marginal cost is less than average variable cost.

If marginal cost exceeds average total cost in the short run, then which is likely to be true?

A) Average total cost is increasing.

B) Average variable cost is decreasing.

C) Average total cost is less than average variable cost.

D) Marginal cost is less than average variable cost.