A business faces both fixed and variable production costs. It is currently operating at the output level that minimises its average total cost. What impact will a small fall in output have on its marginal cost and average variable cost?
- Amarginal cost: fall; average variable cost: fall
- Bmarginal cost: fall; average variable cost: rise
- Cmarginal cost: rise; average variable cost: fall
- Dmarginal cost: rise; average variable cost: rise