The level of output where a straight line drawn from the origin is tangent to the total cost curve is where
A) total cost is at a minimum.
B) average cost is equal to marginal cost.
C) profit is at a maximum.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

The point where a straight line drawn from the origin is tangent to the total cost curve represents the point where average cost is at its minimum, which occurs when average cost equals marginal cost.

The Level of Output Where a Straight Line Drawn from the Origin