The range over which average variable cost is increasing is the same as the range over which
A)marginal cost is decreasing.
B)average fixed cost is increasing.
C)average product is increasing.
D)average product is decreasing.

Question

Quizplus · Accepted Answer

The range over which average variable cost (AVC) is increasing corresponds to the range over which the average product (AP) of labor is decreasing. This is because the AVC is inversely related to the AP of labor; as the AP decreases, it means less output is being produced per unit of input, leading to higher costs per unit, hence an increase in AVC.

The Range Over Which Average Variable Cost Is Increasing Is