If the ATC curve has a positive slope, then the MC curve must be A

Economics Dec 15, 2020

If the ATC curve has a positive slope, then the MC curve must be

A. horizontal.

B. below the ATC curve.

C. above the ATC curve.

D. vertical.

Expert Solution

Answer: B

Marginal cost (MC) measures the change in total cost (TC). Thus, the only way for ATC to be increasing is for MC to be above ATC. This is because the change in TC when MC is above ATC is greater than the current ATC. When you add a change greater than the average, the average increases and thus ATC will increase (have a positive slope) when MC is above it.

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