Marginal costs and average variable costs are equal when
A)average variable cost is a maximum
B)average variable cost is rising
C)average variable cost is falling
D)average variable cost is a minimum

Question

Quizplus · Accepted Answer

Marginal cost equals average variable cost at the minimum point of the average variable cost curve. This is because when marginal cost is less than average variable cost, it pulls the average down, and when it is more, it pushes the average up. Thus, they are equal at the AVC's minimum point.

Marginal Costs and Average Variable Costs Are Equal When