if the marginal cost curve is below the average variable cost curve, then a) average variable cost is decreasing. b) average variable cost is increasing. c) marginal cost must be decreasing. d) average variable cost could either be increasing or decreasing.

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08-12-2022
Business

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if the marginal cost curve is below the average variable cost curve, then a) average variable cost is decreasing. b) average variable cost is increasing. c) marginal cost must be decreasing. d) average variable cost could either be increasing or decreasing.

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sapanpandit sapanpandit · Answer 1 · 2022-12-10T12:51:29+01:00

Average variable cost is decreasing if the marginal cost curve is below the average variable cost curve

The additional costs spent by manufacturing more units of an item or service are known as marginal costs. By dividing the overall change in the cost of manufacturing additional items by the change in the quantity of goods produced, it is determined.

The period of time during which no input is fixed is known as the long run. Everything can be chosen to produce the required amount of output, including building size and equipment. As a result, long-run marginal cost can remain constant even if short-run marginal cost increases due to capacity restrictions.

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