The minimum point of the average total cost curve always occurs at a larger output level than the minimum point of the average variable cost curve because:
A) marginal cost is falling.
B) average fixed costs are rising.
C) average fixed costs are falling.
D) marginal cost is rising.

Question

Quizplus · Accepted Answer

Average fixed costs are falling as output increases, which causes the average total cost curve to reach its minimum at a larger output level than the average variable cost curve.

The Minimum Point of the Average Total Cost Curve Always