Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. The average total cost curve is downward-sloping as output increases from Q = 50 to Q = 100 because:
A. increasing average variable cost outweighs decreasing average fixed cost.
B. decreasing average fixed cost outweighs increasing average variable cost.
C. diminishing returns are not severe enough to outweigh decreasing average fixed cost.
D. marginal cost is increasing.
Answer: B
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