Question

If average total cost is rising, then marginal cost is

Answer 1

Answer:

a. greater than average total cost.

Explanation:

Average total cost  is the cost of a unit output of goods that is being produced. Total Cost is the addition of all the cost of production which include total fixed cost and the total variable cost. Average Total cost is equal to total cost divided by total number of output.

Marginal Cost  This is the change in the opportunity cost when an additional unit is added for production, it is the cost of producing one additional unit of goods.

Therefore, when the average cost of production is increasing,  the marginal cost is greater than average cost, and when the average cost is decreasing the marginal cost is less than average cost. Also when the average cost is neither increasing nor  decreasing, the marginal cost will be equal to average cost.