Marginal cost is equal to average total cost when:
A)marginal cost is at its minimum
B)average total cost is at its minimum
C)average variable cost is falling
D)average fixed cost is rising

Question

Quizplus · Accepted Answer

When marginal cost is equal to average total cost, it means that the last unit produced is adding the same amount of cost to total cost as the average cost of all other units produced. This can only happen when the average total cost is at its minimum, as at this point, the slope of the average total cost curve is equal to the slope of the marginal cost curve. Therefore, the correct answer is B.

Marginal Cost Is Equal to Average Total Cost When