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Assume that the marginal cost (MC) of production is decreasingdecreasing. Can you determine whether the average variable cost (AVC) is increasing or decreasing? Explain.A.Regardless of whether MC is decreasingdecreasing, AVC could be increasing or decreasing depending on whether MC is greater than or less than AVC.B.If MC is decreasingdecreasing, then AVC must be decreasingdecreasing because MC equals the change in total variable cost.C.Regardless of whether MC is decreasingdecreasing, AVC could be increasing or decreasing depending on whether MC is positive or negative.D.Even if MC is decreasingdecreasing, AVC will be increasing because total variable cost (TVC) increases with output.E.MC and AVC are unrelated because MC depends on marginal inputs and AVC depends on variable inputs.
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