In the short run,the marginal cost curve crosses the average total cost curve at:
A) a point just below the average fixed cost curve.
B) the minimum point of the average total cost curve.
C) the maximum point of the average total cost curve.
D) the point where the average total cost curve and average variable cost curve intersect.

Question

Quizplus · Accepted Answer

In the short run, the marginal cost curve intersects the average total cost curve at the minimum point of the average total cost curve. This is because the average total cost curve is U-shaped, with the downward-sloping portion representing economies of scale and the upward-sloping portion representing diseconomies of scale. The marginal cost curve intersects the average total cost curve at the point where these economies and diseconomies balance out, which is the minimum point of the average total cost curve.

In the Short Run,the Marginal Cost Curve Crosses the Average