Question

When the Marginal Cost is rising, what can we say about the Average Total Cost? Please...

When the Marginal Cost is rising, what can we say about the Average Total Cost? Please explain your answer.

Homework Answers

Answer #1

When the marginal cost is declining then the Average total cost is also decreasing. The marginal cost is increasing then also the Average total cost continues till the point where Marginal cost is equal to Average Total Cost. The point where MC = ATC, then the ATC is minimum. After this point the ATC starts to increase.

Refer the attached image it is just for your reference.

As we can see from the above graph the ATC continues to decrease till the point where MC =ATC, and after this point the ATC also starts to increase.

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