1) For the typical firm operating in the short run, the relationship between its marginal cost and average total cost curves is such that A. if average total cost is less than marginal cost, marginal cost must be rising B. if marginal cost is greater than average total cost, then average total cost is falling C. if average total cost is greater than marginal cost, marginal cost must be falling D. if marginal cost equals average total cost, average total cost must be falling Why?
For a typical firm operating in short run, the relation between its Marginal cost and Average total cost is a mathematical relationship. If Average cost is less that Marginal cost, marginal cost must be rising. If average cost is less than marginal cost, marginal cost will lie above average cost and if the output increases, the unit cost will also increase. If the average cost is more than the marginal cost, the marginal cost will lie below the average cost and if the output is increased, the unit cost will decrease. Therefore, the relationship between the MC and AC is such that if ATC is less than MC, MC will rise.

2) The presence of economies and diseconomies of scale explain

A. how much output the firm should produce B. the shape of the firm's long-run average cost curve C. the shape of the firm's short-run marginal cost curve D. the relationship between fixed and variable inputs

Explain.
Economies and diseconomies of scale rise or fall in the long term. After the firm has had a long time in the industry, the factors production increase and start meeting the demand. In the short term the firm produces with minimum amount of factors of production which causes the marginal cost to rise. Thus the presence of economies and diseconomies explain the shape of the firms long run