if fixed costs are 1000 and the marginal cost to produce one

if fixed costs are $1000 and the marginal cost to produce one more unit is $10 per unit, then Average Variable cost is u-shaped True or False?

Solution

If the marginal cost is constant throughout the production process, then the Average Variable Cost will not be U-shaped.

The calculations presented in this Table shows that the value of AVC is gradually falling with the number of quantity. Hence the evidence of u-curve is not found.