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    Question

    Which of the following is

    correct?
    A MC curve is a continuous falling curve Correct Answer Incorrect Answer
    B AVC curve lies about ATC curve Correct Answer Incorrect Answer
    C When MC curve is below ATC curve, ATC is falling Correct Answer Incorrect Answer
    D When MC curve is above ATC curve ATC is falling Correct Answer Incorrect Answer

    Solution

    When the marginal cost is less than average cost, average cost falls with an increase in output. Thus as long as the MC curve lies below the ATC curve, the ATC curve will slope downwards.

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