Asked by Siti nur Jannah on Jun 26, 2024
Verified
If Marginal cost is lower than Average Cost (AC) ,average cost is
A) falling
B) rising
C) constant
D) none of the above
Marginal Cost
Marginal cost is the cost of producing one additional unit of a good or service, which includes all variable costs associated with its production.
Average Cost
The total cost divided by the quantity produced, often used to assess efficiency or profitability.
- Compute and elucidate the mean, incremental, and cumulative expenses.
Verified Answer
SK
Samikshya KhadgiJun 29, 2024
Final Answer :
A
Explanation :
If the marginal cost is lower than the average cost, then each additional unit produced is cheaper than the average of all units produced so far. This will cause the average cost to decrease, resulting in a falling average cost curve.
Learning Objectives
- Compute and elucidate the mean, incremental, and cumulative expenses.