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

Question

Quizplus · Accepted Answer

When marginal cost is above average variable cost, it means that producing an additional unit of output requires more resources than the average unit of output. This implies that the average variable cost is increasing, which is consistent with choice D. Options A and B cannot be correct since they describe the behavior of the average variable cost, not its relationship to the marginal cost. Option C is also incorrect since the average variable cost is a component of the average total cost, and hence it cannot be greater than the total cost.

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