-As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the
A) MC curve slopes upward.
B) MC exceeds the AVC.
C) ATC curve has not yet reached its minimum.
D) None of the above answers is correct.

Question

-As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the
A) MC curve slopes upward. 
B) MC exceeds the AVC. 
C) ATC curve has not yet reached its minimum. 
D) None of the above answers is correct.

Quizplus · Accepted Answer

The Average Variable Cost (AVC) curve starts to slope upward when the Marginal Cost (MC) exceeds the AVC, indicating that producing additional units is becoming more expensive.

-As Illustrated in the Above Figure, After 40 Gallons Are