If Marginal Cost Is Increasing, What Do We Know About Average Cost?

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If Marginal Cost Is Increasing, What Do We Know About Average Cost?

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If marginal cost is increasing, average costs could be rising, falling, or constant. The direction of average costs depends on whether marginal cost is higher or lower than average cost. Explanation: The marginal cost curve goes through the minimum points of both the average variable cost curve and the average total cost curve. Thus, there is a small range where average total costs are falling and average variable costs are rising.
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