As output rises,AVCA) must be rising.B) must be falling.C) may be falling or rising.D) will remain constant.

Question

ganesh sital · Accepted Answer

Final Answer : C, Explanation :  The average variable cost (AVC) can either rise or fall as output rises. It is because AVC is calculated by dividing the total variable cost (TVC) by the quantity of output. If TVC rises at a faster rate than output, then AVC will rise. On the other hand, if TVC rises at a slower rate than output, then AVC will fall. Therefore, the answer is (C) may be falling or rising.

As output rises,AVC

A) must be rising.
B) must be falling.
C) may be falling or rising.
D) will remain constant.

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