-The above figure shows the costs at Barney's Bagel Bakery. After 3,000 bagels are produced each day, the ATC curve starts to slope upward because the
A) MC curve slopes upward.
B) AFC curve (not shown) starts to slope upward
C) MC exceeds the ATC.
D) None of the above answers is correct.

Question

-The above figure shows the costs at Barney's Bagel Bakery. After 3,000 bagels are produced each day, the ATC curve starts to slope upward because the
A) MC curve slopes upward. 
B) AFC curve (not shown) starts to slope upward 
C) MC exceeds the ATC. 
D) None of the above answers is correct.

Quizplus · Accepted Answer

When the ATC curve starts to slope upward after a certain point of production, it indicates that the marginal cost (MC) of producing an additional unit (in this case, a bagel) is higher than the average total cost (ATC) up to that point. This increase in MC relative to ATC causes the ATC to rise.

-The Above Figure Shows the Costs at Barney's Bagel Bakery