MC curve is U-shaped. As output increases, MC curve slopes downward (up to OQ units), reaches the minimum (at point A) and then starts sloping upward beyond OQ level of output. (See Fig.) The U-shape of MC curve is because of the law of variable proportions. It is negatively sloped in the initial stage of production due to increasing returns to the variable factor and is positively sloped thereafter due to decreasing returns to the variable factor.
