The marginal cost curve intersects the short-run average total cost curve where
A) marginal cost is minimized in the short run.
B) average variable costs are minimized in the short run.
C) average total costs are minimized in the short run.
D) average variable costs are maximized in the short run.

Question

Quizplus · Accepted Answer

The intersection of the marginal cost curve and the short-run average total cost curve occurs at the minimum point of the average total cost curve. This is where the firm is producing at the most efficient point in the short run, which minimizes the average total cost. Therefore, the correct choice is C, where average total costs are minimized in the short run.

The Marginal Cost Curve Intersects the Short-Run Average Total Cost