When the average variable cost curve is upward sloping, the marginal cost curve:

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BlackTom AI · Accepted Answer

To tackle this question, let's recall the relationship between the marginal cost (MC) curve and the average variable cost (AVC) curve.
Option a: must be above the average variable cost curve. When AVC is rising, it implies that each additional unit produced increases the average variable cost, which occurs when MC > AVC. Therefore, MC lies above AVC in the region where AVC is rising. This option correctly captures the standard relationship.
Option b: is upward sloping. The fact that AVC is upward sloping does not force MC to be upward sloping in all contexts, because MC can be above AVC but not necessarily have the same slope as AVC at every point. The question asks about position relative to AVC, not about the slope of MC itself, which makes this statement incomplete or potentially misleading.
Option c: is below the average variable cost curve. If MC were below AVC while AVC is rising, that would imply MC < AVC, which would tend to pull AVC down or flatten its slope, contradicting the given condition that AVC is upward sloping. Hence this option is inconsistent with the stated scenario.
Option d: is a straight line. There is no general requirement that MC must be a straight line when AVC is upward sloping. The shapes of MC and AVC can vary depending on cost structures; there is nothing in the condition that necessitates MC to be linear.
Overall, the key concept is the marginal cost crossing and lying relative to the AVC curve: when AVC is rising, MC lies above AVC, reflecting MC > AVC during that interval.

THC - MCD2020 - T3 - 2025 Lecture Quiz 6 - Cost of Production

When the average variable cost curve is upward sloping, the marginal cost curve:

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