Marginal cost is equal to average variable cost
A) when average variable cost is at its minimum value.
B) when marginal cost is at its minimum value.
C) when average variable cost is getting smaller.
D) when average variable cost is getting larger.

Question

Quizplus · Accepted Answer

Marginal cost is equal to average variable cost when average variable cost is at its minimum value. This is because at the minimum value of AVC, the additional cost of producing one more unit (marginal cost) is equal to the average cost of producing each unit (average variable cost).

Marginal Cost Is Equal to Average Variable Cost