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

Question

Quizplus · Accepted Answer

When average variable cost is at its minimum, marginal cost equals average variable cost. Since average total cost includes average fixed cost, marginal cost is less than average total cost at this point.

When Average Variable Cost Is at Its Minimum