The average-total-cost curve intersects
A)average fixed cost at the minimum of average total cost.
B)average variable cost at the minimum of average total cost.
C)marginal cost at the minimum of average total cost.
D)marginal cost at the minimum of marginal cost.

Question

Quizplus · Accepted Answer

The average-total-cost curve intersects the marginal cost curve at the minimum point of the average total cost curve. This is because when marginal cost is less than average total cost, the average total cost is decreasing, and when marginal cost is greater than average total cost, the average total cost is increasing. Thus, the intersection point is where average total cost is minimized.

The Average-Total-Cost Curve Intersects