If average variable costs increase as output increases, then
A) output must be zero.
B) total cost must be constant.
C) total fixed cost must be increasing also.
D) marginal cost must be greater than average variable cost.
E) average total cost must be increasing also.

Question

Quizplus · Accepted Answer

When average variable costs increase as output increases, it implies that the cost of producing an additional unit (marginal cost) is higher than the cost of producing the average unit (average variable cost), leading to an increase in the average variable costs.

If Average Variable Costs Increase as Output Increases, Then