The short-run average variable cost curve
A)is always downward-sloping
B)starts at the origin and always slopes upward
C)starts above the origin and always slopes upward
D)is a horizontal line intersecting the vertical axis
E)slopes downward at low rates of output, then slopes upward at higher rates of output

Question

Quizplus · Accepted Answer

The short-run average variable cost (AVC) curve typically slopes downward initially due to increasing returns to the variable input, then slopes upward as diminishing returns set in at higher levels of output.

The Short-Run Average Variable Cost Curve