Figure 5.2
-Figure 5.2 presents a firm's marginal cost, average total cost, average fixed cost, and average variable cost curves. The firm minimizes average variable costs by producing ________ units.

Question

Quizplus · Accepted Answer

To minimize average variable costs, the firm should produce where AVC is at its lowest point, which is at 100 units of output. At this point, AVC intersects with MC, which also minimizes ATC. Therefore, the firm should produce 100 units of output.

Figure 5.2 -Figure 5.2 Presents a Firm's Marginal Cost, Average Total Cost