average relationship

What is the relationship between average cost and marginal cost?

How does one effect the other?

If MC If MC>AC, then AC is increasing.
If MC=AC, that’s your average cost curve’s minimum point.

It’s easy to check. Suppose you have 4 basketball players, all 6 foot tall. Then average = 6 feet.
Then you have a 5th player.
If his height (marginal contribution to all player’s height) = 5 feet, then the average falls.
If his height = 7 feet, average goes up.

VIX and Dow Jones Average Relationship