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When the average total cost curve is at its minimum? a
When the average total cost curve is at its minimum?
a. average variable cost curve intersects the average total cost curve.
b. average variable cost curve is above the average total cost curve.
c. marginal cost curve intersects the average total cost curve.
d marginal cost curve is above the average total cost curve.
e. average fixed cost curve is above the marginal cost curve.
Expert Solution
c. marginal cost curve intersects the average total cost curve.
The Marginal Cost Curve and Average Total Cost Curve share the following relationship in the production cycle.
1. When the Marginal cost curve is falling, it lies below Average Total Cost.
2. Marginal Cost Curve cuts Average Cost Curve at its minimum and then start rising.
3. When the Marginal Cost Curve is rising, it lies above the Average Total Cost.
The Relationship between marginal cost curve and the average cost curve is shown in the following graph.
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