Average cost curves.

The average variable cost curve will

5.1 eventually rise with output, while the average fixed cost curve
always falls with output. The interaction of these two effects
produces a U-shaped average cost curve.
Let us now consider the marginal cost curve. What is its relationship to
the average cost curve? Let y* denote the point of minimum average cost;
then to the left of y'average costs are declining so that for y 5 y