what is the relation between MC and AVC when MC is rising and AVC is falling ?

Dear student,

The relation between MC and AVC are as follows:

1. When MC <AVC, AVC falls with increase in the output.
2 When MC=AVC, i.e. when MC and AVC curves intersect each other at point B), AVC is constant and at its minimum point.
3. When MC > AVC, AVC rises with increase in output.
4. Thereafter, both AVC and MC rise, but MC increases at a faster rate as compared to AVC. As a result, MC curve is steeper as compared to AVC curve.

Regards

  • 2
When MC is rising and AVC is falling, MC < AVC, i.e. MC curve lies below the AVC curve. 
  • 6
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