When the marginal cost curve lies above the average cost curve,________.

Question

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When the marginal cost curve lies above the average cost curve, it indicates that the additional cost of producing one more unit is higher than the average cost of production up to that point. This situation typically occurs when both curves are sloping upward, as increasing production leads to higher costs per unit due to factors like diminishing returns.

When the Marginal Cost Curve Lies Above the Average Cost