In the figure given below,curves F,C,and G denote the total cost,the total variable cost,and the total fixed cost of a firm.
-In Figure 8-1,R identifies the point:
A)of inflection.
B)where AVC reaches a minimum.
C)where MC reaches a minimum.
D)where diminishing marginal returns set in.

Question

In the figure given below,curves F,C,and G denote the total cost,the total variable cost,and the total fixed cost of a firm. 
-In Figure 8-1,R identifies the point:
A)of inflection. 
B)where AVC reaches a minimum. 
C)where MC reaches a minimum. 
D)where diminishing marginal returns set in.

Quizplus · Accepted Answer

Point R is where the Average Variable Cost (AVC) reaches its minimum value, which is also the point where the Marginal Cost (MC) curve intersects the AVC curve. At this point, the firm is producing at the lowest possible average variable cost, which is a desirable outcome for maximizing profits in the short run. Therefore, the correct choice is B.

In the Figure Given Below,curves F,C,and G Denote the Total