Which of the following offers the most likely explanation of why average total cost is falling in a cereal factory?

a. Production bottlenecks and equipment breakdowns have stalled production.
b. The production facility was designed for a lower level of output.
c. The wholesale prices of grains and fruit have risen due to market demands.
d. The cost of producing an additional box of cereal is less than the factory’s average total cost.


d. The cost of producing an additional box of cereal is less than the factory’s average total cost.

Economics

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