Whenever marginal cost is positive, average cost curves are upward sloping.

Question

Quizplus · Accepted Answer

Marginal cost being positive does not necessarily mean average cost curves are upward sloping. Average cost curves can slope upwards, downwards, or even remain constant depending on the relationship between the marginal cost and the current average cost. If marginal cost is below average cost, the average cost will decrease, and if marginal cost is above average cost, the average cost will increase.

Whenever Marginal Cost Is Positive, Average Cost Curves Are Upward