The marginal cost curve always intersects the average total cost curve at the point at which the average total cost curve
A) is zero.
B) is at its minimum.
C) is at its maximum.
D) has a vertical slope.

Question

Quizplus · Accepted Answer

The point where the marginal cost curve intersects the average total cost curve is the minimum point of the average total cost curve. This is because the marginal cost curve intersects the average total cost curve from below, and as long as the marginal cost is below the average total cost, the average total cost will continue to decrease. Once the marginal cost increases above the average total cost, the average total cost will increase. Therefore, the point of intersection is the minimum point of the average total cost curve.

The Marginal Cost Curve Always Intersects the Average Total Cost