The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-Refer to Table 8.5. At what level of production will the average total cost curve intersect the marginal cost curve?
A)3 units
B)2 units
C)1 unit
D)5 units
E)4 units

Question

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5
 
-Refer to Table 8.5. At what level of production will the average total cost curve intersect the marginal cost curve?
A)3 units 
B)2 units 
C)1 unit 
D)5 units 
E)4 units

Quizplus · Accepted Answer

The average total cost curve intersects the marginal cost curve at the point where the average total cost is at its minimum. Looking at the table, we can see that the average total cost is at its minimum at 4 units of output, where it is $12.50. This is also the point where the marginal cost is equal to $12.50, which is the same as the average total cost. Therefore, the answer is E) 4 units.

The Table Given Below Shows the Average Total Cost of Production