True or False: In marginal analysis, a firm should continue to produce additional units of a good as long as the marginal cost of production is less than the average cost of production.

The statement is false. In marginal analysis a firm continues production while its marginal cost is lower than its marginal revenue, not the average cost. The average cost is irrelevant to the decision to add units; it only matters for profit maximization. For example, if a firm’s marginal cost is $5 and its marginal revenue is $7, it should keep producing even though the average cost might be $6. Thus, the correct rule is to compare marginal cost to marginal revenue, not average cost.