Figure 7.1 -Refer to Figure 7.1. At what level of output does average total cost equal marginal cost? A) Q₂ B) Q₃ C) Q₄ D) Q₅ E) none of the above

Question

Quizplus · Accepted Answer

At the level of output Q₄, the average total cost curve intersects the marginal cost curve. This is the point of minimum average total cost and is known as the efficient scale of production. Therefore, this is the level of output where the firm should operate in order to minimize its costs and maximize profits.

Figure 7.1 -Refer to Figure 7.1. at What Level of Output Does