When Eliza produces 20 dog treats, the marginal cost of producing the 20th dog treat is $1, and the average total cost of producing 20 dog treats is $1.25. Based on this information, the quantity where marginal cost intersects the average total cost curve is:

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Quizplus · Accepted Answer

The marginal cost intersects the average total cost curve at its minimum point. Since the marginal cost of the 20th treat is less than the average total cost, the average total cost is decreasing, indicating the intersection occurs at a quantity greater than 20.

When Eliza Produces 20 Dog Treats, the Marginal Cost of Producing