If the Average Total Cost Curve Is Falling, What Is

question 156

Essay

If the average total cost curve is falling, what is necessarily true of the marginal cost curve? If the average total cost curve is rising, what is necessarily true of the marginal cost curve?

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Definitions:

Short-Run Supply

The total quantity of goods and services that producers are willing and able to sell at a given price in the short term, considering some inputs as fixed.

U-Shaped

Describes the shape of certain graphs, such as average cost curves in economics, indicating a period of declining costs followed by increasing costs as output rises.

Short-Run Cost Curve

A graph showing the relationship between the cost of producing goods and the output level in the short term, when at least one input is fixed.

Lease Rate

The cost of renting a property, equipment, or other assets, typically expressed as a monetary payment per time period.