Marginal cost:
A)intersects both the average variable cost and the average cost curves at their minimum points
B)is defined as the difference between total cost and variable cost
C)rises for a time, but then begins to decline once the law of diminishing marginal returns begins to apply
D)declines so long as output increases
E)intersects the average fixed cost curve at its minimum point

Question

Quizplus · Accepted Answer

Marginal cost intersects both the average variable cost (AVC) and the average total cost (ATC) curves at their minimum points. This is because when marginal cost is below these averages, it pulls them down, and when it is above, it pushes them up, indicating the point of minimum average cost coincides with where MC intersects AVC and ATC.

Marginal Cost