If the marginal cost curve is below the average variable cost curve, then
A) average variable cost is increasing.
B) average variable cost is decreasing.
C) average variable cost is constant.
D) marginal cost is increasing.

Question

Quizplus · Accepted Answer

When the marginal cost curve is below the average variable cost curve, it means that the additional cost of producing one more unit is less than the average of all units produced so far, which leads to a decrease in the average variable cost.

If the Marginal Cost Curve Is Below the Average Variable