Economics Cost Of Production Questions
The relationship between average total cost and marginal cost is that marginal cost represents the additional cost incurred by producing one more unit of output, while average total cost represents the total cost per unit of output. In general, when marginal cost is below average total cost, average total cost decreases. Conversely, when marginal cost is above average total cost, average total cost increases. Therefore, the relationship between the two is that average total cost is influenced by the changes in marginal cost.