Question

2. When marginal cost falls, total cost
(a) increases
(f) remains same
(c) increases at a decreasing rate
(d) becomes zero​

Answer 1

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Answer 2

Answer:

(c) increases at a decreasing rate

Explanation:

When marginal cost is below average total cost, average total cost will be falling, and when marginal cost is above average total cost, average total cost will be rising. A firm is most productively efficient at the lowest average total cost, which is also where average total cost (ATC) = marginal cost (MC).

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