Average total cost decreases because of marginal cost behavior. When marginal cost decreases, production of extra units becomes cheaper as compared to previous units. This is why average total cost starts to decrease. When marginal cost starts increasing to the point where increments in marginal cost nullify the fixed cost effect in average total cost, average cost finds its minimum value. The increase in marginal value causes an increase in average cost because extra units of production are now more expensive than previous units. This leads to the average cost starting to increase again.