Option 1 states that if the average total cost is declining, then the marginal cost must be less than the average total cost. Marginal cost refers to the additional cost incurred from producing one additional unit of output, while average total cost refers to the total cost divided by the quantity of output.

When the average total cost is declining, it means that the cost per unit of output is decreasing. In order for this to happen, the marginal cost of producing the additional unit must be less than the average total cost. This is because if the marginal cost is greater than the average total cost, producing an additional unit would increase the average total cost, resulting in an increase rather than a decline.

Option 2 states that the total cost must be constant, which is incorrect. The average total cost can decline even if the total cost is not constant.

Option 3 states that the average fixed cost curve must be above the average variable cost curve. While the relationship between average fixed cost and average variable cost can affect the average total cost, it does not necessarily determine whether the average total cost is declining or not. Therefore, this option is not directly related to the given statement.

Option 4 states that the marginal cost must be greater than the average total cost. This is incorrect because