Which of the following is correct

Correct option is C

In microeconomic theory, when the marginal cost curve lies above the average variable cost curve, the AVC starts increasing. This happens because the cost of producing an additional unit is higher than the existing average, which pulls the average upward. Therefore, the condition where MC is above AVC indicates that AVC is rising. Hence, option (c) is the correct statement.
Information booster: Marginal cost determines the direction of movement of average cost curves. AVC initially declines due to better utilization of variable factors. ATC always remains above AVC because it includes fixed costs. Cost curves are essential for production and pricing decisions.
Why other options are incorrect: (a) MC curve is U-shaped and not continuously falling. (b) AVC always lies below ATC due to exclusion of fixed costs. (d) AVC falls only when MC lies below AVC.