If marginal cost is above average variable cost, then
A) average variable cost is increasing.
B) marginal cost must be decreasing.
C) average variable cost is constant.
D) average variable cost is decreasing.

Question

Quizplus · Accepted Answer

When marginal cost is above average variable cost, it means that the cost of producing one more unit is higher than the average of all units produced so far, which pulls the average variable cost upwards, indicating that average variable cost is increasing.

If Marginal Cost Is Above Average Variable Cost, Then