If average cost is decreasing, A. marginal cost exceeds average cost. B. marginal cost equals average...
If average cost is decreasing,
A.
marginal cost exceeds average cost.
B.
marginal cost equals average cost.
C.
marginal cost is less than average cost.
D.
Not enough information.
Homework Answers
Answer
Option
C.
marginal cost is less than the average cost
Average cost =total cost /quantity
Marginal cost =change in the total cost
so the change in per-unit cost as it adds is marginal cost.
If an average is decreasing so the number getting added to it is below the average so the marginal cost is below the average cost.
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