If marginal costs rises above average costs,average costs must
A)Be increasing
B)Be decreasing
C)Stay constant
D)None of the above

Question

​If marginal costs rises above average costs,average costs must
A)​Be increasing
B)Be decreasing
C)Stay constant
D)​None of the above

Quizplus · Accepted Answer

When marginal cost exceeds average cost, the average cost must be influenced by the marginal cost. Since marginal cost always intersects the average cost curve at its minimum point, if the marginal cost continues to rise above the average cost, the curve would start rising again, leading to an increase in average cost. Therefore, the correct choice is A which states that average cost is increasing.

​If Marginal Costs Rises Above Average Costs,average Costs Must

If Marginal Costs Rises Above Average Costs,average Costs Must