The marginal cost curve may intersect the average cost curve anywhere on the curve that is less than the minimum point.

Question

Quizplus · Accepted Answer

The marginal cost curve will intersect the average cost curve at the minimum point of the average cost curve. This is because the marginal cost curve reflects the additional cost of producing one more unit, and when it intersects the average cost curve at its minimum, it means that the cost of producing that additional unit is equal to the average cost of producing all units up to that point. If the marginal cost curve intersects the average cost curve anywhere else, it would imply that the cost of producing one more unit is either lower or higher than the average cost, which would cause the average cost curve to move in a different direction, violating the assumption that the minimum point of the average cost curve represents the most efficient level of production.

The Marginal Cost Curve May Intersect the Average Cost Curve