The marginal cost and average cost curves always intersect at the minimum average cost.

Question

Quizplus · Accepted Answer

This statement is true. The minimum point on the average cost curve represents the point where the cost per unit of output is the lowest. At this point, the marginal cost curve intersects the average cost curve. This is because if the marginal cost is below the average cost, producing more output will reduce the average cost, and if the marginal cost is above the average cost, producing less output will reduce the average cost. Therefore, the minimum point on the average cost curve represents the point of optimum production.

The Marginal Cost and Average Cost Curves Always Intersect at the Minimum