A firm's marginal cost curve

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average cost curve at its minimum point. This is because the average cost curve is U-shaped, which means that it slopes downwards as output increases, reaches a minimum, and then slopes upwards. The marginal cost curve intersects the average cost curve at the minimum point because the slope of the average cost curve is zero at this point, which means that a small increase in output (i.e. the marginal cost) does not change the average cost.

A Firm's Marginal Cost Curve