At all levels of production beyond the point where the marginal cost curve crosses the average variable cost curve, average variable cost:
A)falls
B)rises
C)remains unaffected
D)all of the above are possible; it depends on the shape of the marginal cost curve

Question

Quizplus · Accepted Answer

Beyond the point where the marginal cost curve crosses the average variable cost curve, the average variable cost curve rises. This is because the marginal cost curve intersects the average variable cost curve at its lowest point, and as production increases beyond this point, the marginal cost of producing each additional unit of output increases, causing the average variable cost to rise. Therefore, option B is the correct answer.

At All Levels of Production Beyond the Point Where the Marginal