Answer to Question #275187 in Microeconomics for Jonas

Question

Which of the following is always downward-sloping? (4 Marks)

a. The marginal cost curve when it is below the average total cost curve.

b. The marginal cost curve when it is above the average total cost curve.

c. The average total cost curve when it is below the marginal cost curve.

d. The average total cost curve when it is above the marginal cost curve

Answer 1

d. The average total cost curve when it is above the marginal cost curve.

Explanation;

The average curve rises when the marginal cost curve is higher than the usual cost curve. The average curve is dropping when the marginal costs curve is beneath the average curve. Whenever the marginal curve is growing or declining, this relationship maintains.