When marginal cost is ABOVE average variable cost,average variable cost must be:
A)at its minimum.
B)at its maximum.
C)falling.
D)rising.

Question

Quizplus · Accepted Answer

When marginal cost is above average variable cost, this means that the cost of producing an additional unit is higher than the average cost of producing each unit up to that point. This indicates that the variable costs are increasing at a faster rate than the total output, causing the average variable cost to rise. Therefore, the correct choice is (D) rising.

When Marginal Cost Is ABOVE Average Variable Cost,average Variable Cost