While studying the relationship between total cost and marginal cost , few things are observed.
When the rate of increase in total costs starts rising , the marginal cost _______

increases

The correct answer is option 2: increases

Marginal cost (MC) is the additional cost incurred for producing one more unit of output. It is derived from the total cost (TC) function. If the rate of increase in total cost rises, it means that the cost of producing additional units is increasing at an increasing rate. This directly implies that marginal cost is increasing.