Figure 13-5
-Refer to Figure 13-5. Curve D intersects curve C
A)where the firm maximizes profit.
B)at the minimum of average fixed cost.
C)at the efficient scale.
D)where fixed costs equal variable costs.

Question

Figure 13-5 
-Refer to Figure 13-5. Curve D intersects curve C
A)where the firm maximizes profit. 
B)at the minimum of average fixed cost. 
C)at the efficient scale. 
D)where fixed costs equal variable costs.

Quizplus · Accepted Answer

Curve D represents the long-run average total cost curve, while curve C represents the short-run average total cost curve. The point where they intersect represents the efficient scale of production, which is the output level where the firm is producing at the minimum point on its long-run average total cost curve. Therefore, the correct answer is C, at the efficient scale.

Figure 13-5 -Refer to Figure 13-5. Curve D Intersects Curve C