Which of the following is true in the short run?
A) MC = ATC at the lowest point of ATC.
B) MC = AVC at the lowest point of AVC.
C) When AVC is at its minimum point, ATC is falling.
D) All of the above are true.

Question

Quizplus · Accepted Answer

MC = ATC at the lowest point of ATC because ATC is the sum of AVC and AFC, and AFC is constant in the short run. MC = AVC at the lowest point of AVC because AVC is the variable cost per unit of output, and MC is the change in total variable cost per unit of output. When AVC is at its minimum point, ATC is falling because ATC is the sum of AVC and AFC, and AFC is constant in the short run.

Which of the Following Is True in the Short Run