When marginal cost exceeds the average variable cost,average variable cost must be increasing.

Question

Quizplus · Accepted Answer

When the marginal cost exceeds the average variable cost, it means that the additional cost of producing one more unit is higher than the average variable cost of producing all the units. This implies that the cost of producing each additional unit is higher than the average cost of producing the previous units, which results in an increase in the average variable cost. Therefore, the statement is true, and the answer is A.

When Marginal Cost Exceeds the Average Variable Cost,average Variable Cost