You Observe That at Your Current Production of Lunch Boxes

question 38

Multiple Choice

You observe that at your current production of lunch boxes, the average total cost of producing lunch boxes is $5 and the marginal cost of producing lunch boxes is $2. What should always happen if you increase lunch box production?

• A) Marginal cost will rise.
• B) Marginal cost will fall.
• C) Average total cost will rise.
• D) Average total cost will fall.