When MC is rising but still below AVC,then

A) AVC is declining.
B) AVC is constant.
C) AVC is rising.
D) There is not enough information to determine what AVC is doing.

Question

When MC is rising but still below AVC,thenA) AVC is declining.B) AVC is constant.C) AVC is rising.D) There is not enough information to determine what AVC is doing.

fasline juwairiya · Accepted Answer

Final Answer : A, Explanation :  When MC (Marginal Cost) is below AVC (Average Variable Cost) and rising, it means that the cost of producing an additional unit is increasing but is still less than the average variable cost per unit. This scenario typically occurs when AVC is declining because the MC must cross AVC at its minimum point. Thus, as MC approaches AVC from below, AVC is decreasing.

When MC is rising but still below AVC,then

A) AVC is declining.
B) AVC is constant.
C) AVC is rising.
D) There is not enough information to determine what AVC is doing.

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