If we assume that both the marginal cost and average cost curves are U shapes, then at the minimum point on the average variable cost curve, marginal cost must be:
A) at its minimum
B) at its maximum
C) greater than average cost
D) less than average cost
E) equal to average cost

Question

Quizplus · Accepted Answer

At the minimum point on the average variable cost curve, marginal cost must be equal to average cost. This is because at the minimum point, the average cost curve is tangent to the marginal cost curve. This means that the slope of the average cost curve is equal to the slope of the marginal cost curve. In other words, the rate of change in cost per unit of output is the same at the minimum of the average cost curve as it is at the marginal cost curve. Therefore, marginal cost must be equal to average cost at the minimum point on the average variable cost curve.

If We Assume That Both the Marginal Cost and Average