The marginal cost will intersect the average variable cost curve
A)when the average variable cost curve is rising.
B)where average variable cost curve equals price.
C)at the minimum point of the average variable cost curve.
D)The two will never intersect.

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average variable cost (AVC) curve at its minimum point. This is because at the minimum point of the AVC curve, the slope of the curve is zero, which means that the AVC curve is at its flattest point, and any further increase in output will not cause a significant change in the AVC. At this point, the marginal cost curve intersects the AVC curve and becomes equal. If the marginal cost is below the AVC, then the AVC will continue to decrease, and if the marginal cost is above the AVC, then the AVC will start to increase. Therefore, the intersection of the marginal cost and AVC curves occurs at the minimum point of the AVC curve.

The Marginal Cost Will Intersect the Average Variable Cost Curve