The marginal cost (MC) curve intersects both the average variable cost (AVC) and average total cost (ATC) curves at their respective minimum points. This is because when MC is below AVC or ATC, it pulls them down, and when it is above, it pushes them up.

Solved

The MC of a Firm

Question 62

Multiple Choice

The MC of a firm:

A) crosses TC at its minimum.
B) crosses AVC and ATC at its minimum.
C) crosses MR at the above the profit-maximizing level of output.
D) is a horizontal line indicating that costs are constant in perfect competition.

Correct Answer: