If the average variable cost curve is below the marginal cost curve, then

A) marginal costs must be decreasing.
B) marginal costs must be increasing.
C) marginal costs can be either increasing or decreasing.
D) average variable costs must be decreasing.

Learning Objectives

• Acquire knowledge on the fundamentals of Marginal Cost (MC), Average Variable Cost (AVC), Average Fixed Cost (AFC), Total Variable Cost (TVC), Total Fixed Cost (TFC), Total Cost (TC), and Average Total Cost (ATC).
• Scrutinize the dynamics and interactions of cost curves (MC, AVC, AFC, TC, ATC) within short-run production scenarios.