Which statement below is accurate regarding the relationship between marginal cost and average cost?

Show Answers

When marginal cost exceeds average cost, the average cost decreases.When marginal cost is higher than average cost, the average cost rises.A positive marginal cost means total costs have reached their maximum.If marginal cost is negative, total costs grow but at a slower pace as output rises.

Explanation

If the marginal cost is greater than the average cost, it causes the average cost to increase. Conversely, when marginal cost is less than average cost, the average cost decreases. Marginal cost does not directly indicate that total costs are maximized, and a negative marginal cost implies total costs decrease rather than increase.