Which one of the following is NOT true about the relationship between Average Cost (AC) and Marginal Cost (MC)?

Correct option is C

· When AC is constant, MC = AC, as marginal cost equals average cost at the minimum point of the AC curve.
· (a) is correct: When MC is falling, it affects AC at a slower rate since AC averages out the marginal changes.
· (b) is correct: MC can increase while AC decreases due to the averaging effect of total costs.
· (d) is correct: MC intersects AC at the latter's minimum.
Information Booster:
· The intersection of MC and AC at AC's minimum is crucial as it represents the point where AC stops falling and begins to rise.
· Relationship Dynamics:
· MC < AC → AC is decreasing.
· MC > AC → AC is increasing.
· MC = AC → AC is at its minimum.