If the marginal cost is above the average cost at a certain level of production and the firm decides to increase output, then: a. The average cost will increase but the marginal cost will decrease. b. Both the average and the marginal cost will increase. c. The average cost will increase but the average cost will decrease. d. Both the average and the marginal cost will decrease.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 4CQQ
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If the marginal cost is above the average cost at a certain level of production and the firm
decides to increase output, then:
a. The average cost will increase but the marginal cost will decrease.
b. Both the average and the marginal cost will increase.
c. The average cost will increase but the average cost will decrease.
d. Both the average and the marginal cost will decrease.

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