If the average total cost is declining then :

In microeconomics, the relationship between marginal cost (MC) and average total cost (ATC) is fundamental to cost theory. When the average total cost is declining, the marginal cost must be less than the average total cost [1]. This occurs because the cost of producing one additional unit (MC) is lower than the current average, thereby pulling the overall average down. The MC curve intersects the ATC curve at its minimum point; to the left of this intersection, where ATC is falling, MC is always positioned below ATC [1]. Conversely, when MC is greater than ATC, the average total cost begins to rise. This mathematical relationship is analogous to how a student's grade on a new assignment (marginal) affects their cumulative grade point average (average). Therefore, if ATC is decreasing, MC is necessarily lower than ATC.

Sources

1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 3: Production and Costs > Shapes of the Long Run Cost Curves > p. 50