Marginal cost (MC) is equal to average total cost (ATC) at
A) the maximum point of the ATC.
B) the minimum point of the ATC.
C) no point.
D) the minimum point of the MC.
E) the maximum point of the MC.

Question

Quizplus · Accepted Answer

Marginal cost (MC) intersects the average total cost (ATC) at the ATC's minimum point. This is because when MC is below ATC, it pulls the ATC down, and when MC is above ATC, it pushes the ATC up. The point of intersection, therefore, represents the lowest point of the ATC curve.

Marginal Cost (MC) Is Equal to Average Total Cost (ATC)