The marginal cost curve intersects the average total cost curve at its:
A) maximum.
B) lowest point.
C) endpoint.
D) beginning.

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average total cost curve at its lowest point, also known as the point of minimum efficient scale. At this point, the firm is producing at the lowest possible cost. If the marginal cost curve was below the average total cost curve, the average total cost would be decreasing, and if the marginal cost curve was above the average total cost curve, the average total cost would be increasing.

The Marginal Cost Curve Intersects the Average Total Cost Curve