AP Microeconomics Unit 3 Practice Test

If a firm’s average total cost curve is increasing as output increases, the firm’s marginal cost must be

greater than average total cost. a price taker. if MC is greater than ATC and AVC, then ATC and AVC must be increasing. This is short-run diminishing marginal returns.

Correct Answer:

greater than average total cost.

Explanation:

Correct answer: greater than average total cost.

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