For the output levels in Table 21.2, the minimum of the average variable cost curve occurs at a production rate of
A) Zero units per day.
B) 10 units per day.
C) 20 units per day.
D) 30 units per day.

Question

For the output levels in Table 21.2, the minimum of the average variable cost curve occurs at a production rate of
A) Zero units per day. 
B) 10 units per day. 
C) 20 units per day. 
D) 30 units per day.

Quizplus · Accepted Answer

The minimum of the AVC curve occurs at the output level where the AVC curve intersects with the MC curve from below. From the given table, we can see that the minimum point of the AVC curve is at an output level of 20 units per day, where AVC is $6.50. Therefore, the correct answer is choice C.

For the Output Levels in Table 21