what would be the output voltage at "ac sig out" if the mic's output is below ground? Since the mic's output can be a negative voltage, I don't understand what will happen at the output because oviously the output can't be below gnd.
There is no confusion. The average value of signal after capacitive coupling to output is zero. DC do not pass capacitor. So signal excursions after coupling capacitor goes positive and negative in respect to ground. Signal at collector has average value at approximately half of supply voltage and excursions goes from near ground to Vcc it goes never below ground or above Vcc. The same is with microphone. It's amplifier is in A class having DC level at approx. 1/2Vcc or something like this. Mic output signal may "reach " GND and Vcc. It is never negative by it's potential in respect to GND.