10. The Costs of Production
The Relationship Between Average Cost and Marginal Cost
Multiple Choice
Multiple ChoiceA firm is currently producing 100 units with an average total cost of $44 and a marginal cost of $32. If it were to increase production to 101 units, which of the following must be true?
A
Average total cost would decrease.
B
Average total cost would increase.
C
Marginal cost would decrease.
D
Marginal cost would increase.
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