Assume a firm's average total cost equals $75

Assume a firm's average total cost equals $75 and average variable cost equals $65 at the current level of production. If the marginal cost of producing the next unit equals $60, then:
Answer

average total cost will fall and average variable cost will rise.

average total cost will fall and average variable cost will fall.

average total cost will rise and average variable cost will fall.

average total cost will rise and average variable cost will rise.