Which of the following is correct as it relates to cost curves?
A)Average variable cost intersects marginal cost at the latter's minimum point.
B)Marginal cost intersects average total cost at the latter's minimum point.
C)Average fixed cost intersects marginal cost at the latter's minimum point.
D)Marginal cost intersects average fixed cost at the latter's minimum point.

Question

Quizplus · Accepted Answer

Marginal cost intersects average total cost at its minimum point because when marginal cost is below average total cost, it pulls the average total cost down, and when it is above, it pulls the average total cost up. This intersection point is where average total cost is at its minimum.

Which of the Following Is Correct as It Relates to Cost