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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.

Respuesta :

Answer:

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