When average total cost is at its minimum:
A) average variable cost is declining with increases in output.
B) average variable cost plus average fixed cost is declining with increases in output.
C) average total cost is equal to average variable cost.
D) marginal cost is equal to average variable cost.
E) marginal cost is equal to average total cost.

Question

Quizplus · Accepted Answer

When average total cost is at its minimum, marginal cost equals average total cost. This is because the marginal cost curve intersects the average total cost curve at its lowest point, indicating the most efficient scale of production.

When Average Total Cost Is at Its Minimum