🔎 MC, AC and AVC

When $MC < AC$, AC↓
When $MC > AC$, AC↑
Conclusion: AC “follows” MC, like a dog following a toddler.

BUT MC doesn’t follow AC. MC is driven by the factors of production that are fixed in the short run.
❔What if $MC > AC$, what do we know about what MC will do?
✔NOTHING. The dog follows the toddler. The toddler doesn’t follow the dog.

When $MC < AVC$, AVC↓ (AVC follows MC down)
When $MC > AVC$, AVC↑ (AVC follows MC up)
Conclusion: AC “follows” MC, like a dog following a toddler.

BUT MC doesn’t follow AVC. MC is driven by the factors of production that are fixed in the short run.
❔What if $MC > AVC$, what do we know about what MC will do?
✔NOTHING. The dog follows the toddler. The toddler doesn’t follow the dog.