MC curve initially falls and then rises
MC initially rises and then falls
MC continuously rises
None of the above
✅ The correct answer is A.
As output increases when MC curve initially falls and then rises. The Marginal Cost curve is U shaped because initially when a firm increases its output, total costs, as well as variable costs, start to increase at a diminishing rate. Then as output rises, the marginal cost increases.
As output increases when MC curve initially falls and then rises. The Marginal Cost curve is U shaped because initially when a firm increases its output, total costs, as well as variable costs, start to increase at a diminishing rate. Then as output rises, the marginal cost increases.