-As illustrated in the above figure, after 60 gallons are produced each hour at Ike's Ice Cream Kitchen, the ATC curve starts to slope upward. The ATC starts to slope upward because the
A) MC curve slopes upward.
B) MC exceeds the ATC.
C) distance between the ATC and the AVC curve is shrinking.
D) None of the above answers is correct.

Question

-As illustrated in the above figure, after 60 gallons are produced each hour at Ike's Ice Cream Kitchen, the ATC curve starts to slope upward. The ATC starts to slope upward because the
A) MC curve slopes upward. 
B) MC exceeds the ATC. 
C) distance between the ATC and the AVC curve is shrinking. 
D) None of the above answers is correct.

Quizplus · Accepted Answer

The ATC (Average Total Cost) curve starts to slope upward when the MC (Marginal Cost) exceeds the ATC because additional units cost more than the average, pulling the average up.

-As Illustrated in the Above Figure, After 60 Gallons Are