If the marginal cost (MC) curve is rising and is above the average fixed cost (AFC) curve, then
A)the AFC curve is rising.
B)the AFC curve is declining, although the MC curve has nothing to do with this.
C)the AFC curve is at its minimum point.
D)the AFC curve is at its maximum point.
E)Nothing certain can be said about the AFC curve without additional information.

Question

Quizplus · Accepted Answer

The AFC curve declines as output increases because fixed costs are spread over a larger number of units. The position of the MC curve above the AFC curve does not influence the behavior of the AFC curve, which naturally declines due to the spreading effect.

If the Marginal Cost (MC) Curve Is Rising and Is