The intersection of marginal cost curves and the average variable cost curve takes place at the minimum or bottom of average cost curves. It is so because the marginal cost associated with the production of the next unit of output also has an impact on the average cost of production.

Average Cost:

The average cost of producing a product is the per-unit cost associated with the production process. The average cost can be calculated by dividing the total cost of production from the unit of output produced.