The marginal cost curve intersects the average cost curve:
A) on the downward-sloping portion.
B) on the upward-sloping portion.
C) at its minimum point.
D) on the vertical portion.

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average cost curve at its minimum point. This is because the point where the marginal cost is equal to the average cost is the point where the average cost curve is at its lowest. Beyond this point, as the marginal cost becomes higher than the average cost, the average cost curve starts upward sloping. Before this point, as the marginal cost is lower than the average cost, the average cost curve is also downward sloping. Therefore, the intersection point must be the minimum point of the average cost curve.

The Marginal Cost Curve Intersects the Average Cost Curve