If marginal cost (MC) is $12 and average variable cost (AVC) is $10, then AVC
A) is at a minimum.
B) is at a maximum.
C) is increasing.
D) is decreasing.

Question

Quizplus · Accepted Answer

When marginal cost (MC) is above average variable cost (AVC), AVC is increasing. This is because the marginal cost represents the cost of producing one additional unit, and if it's higher than the average, it pulls the average up.

If Marginal Cost (MC) Is $12 and Average Variable Cost