A Monopolistic-Competitive Firm in a Market Before Trade Opens
(Figure 6.2)

Costs depend on production technology and input prices. If there are some economies of scale, then (long-run) average cost decreases as planned output expands, at least for some range of output. Press "Show AC" to display this downward-sloping portion of the average cost curve in the graph. If average cost is declining as output expands, then marginal cost is less than average cost. The marginal cost curve could have various possible shapes. Press "Show MC" to display one reasonable shape for the marginal cost curve in the graph.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.