If the marginal cost curve is above 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 decreasing.

Question

Quizplus · Accepted Answer

When the marginal cost curve is above the average variable cost curve, it means that the cost of producing one more unit is higher than the average of all units produced so far, which causes the average variable cost to increase.

If the Marginal Cost Curve Is Above the Average Variable