At an output at which ATC is less than MC: a

Accounting Dec 07, 2020

At an output at which ATC is less than MC:

a. the AFC curve is upward sloping.

b. the ATC curve is upward sloping.

c. the ATC curve is downward sloping.

d. the AVC curve is upward sloping.

Expert Solution

b. the ATC curve is upward sloping

As long as the average total cost stays lower relative to the marginal cost, the marginal cost puts upward pressure on average variable costs. Henceforth, the average cost increases. Therefore, the increasing counts of average cost make its upward sloping.

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