The marginal cost curve:
A) intersects the average cost curve from above at the efficient scale of production.
B) lies below the average cost curve.
C) intersects the average cost curve from below at the highest point on the average cost curve.
D) intersects the average cost curve from below at the efficient scale of production.

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average cost curve from below at the efficient scale of production, where the average cost curve is at its lowest point. This is because at the efficient scale, the additional cost of producing one more unit (marginal cost) is equal to the average cost per unit. As output increases beyond the efficient scale, the average cost curve starts to rise, and the marginal cost curve intersects it from above. Therefore, option D is the correct answer.

The Marginal Cost Curve