Suppose that a firm's total fixed cost is `₹ 100`, and the marginal cost schedule of a firm the following :

(a) Is the MC cirve U-shaped ?
(b) Derive the AVC schedule . Will the AVC curve be U-shaped ? Discuss why or why not.

Explanation

(a) Generally, MC curve is U-shaped due to Law of Variable Properties. However, in the present case, MC curve will not be U-shaped as it is continuously increasing.
(b) .
Like MC curve, AVC is also a U-shaped curve due to Law of Variable Propertions. However, in the present case, AVC curve will not be U-shaped as it is continuously increasing.