Question

Marginal cost curve intersects average cost curve at ..........

• A. At maximum point of average cost curve.
• B. At minimum point of average cost curve.
• C. Do not intersect.
• D. Intersect at mid point at rising average cost curve.

Hint:

Think of AC like an average score and MC as a new score. If the new score is lower, average falls; if higher, average rises; if equal, average stays constant → minimum point.

Answer 1

The Correct Option is B

Step 1: Understand the relationship between Marginal Cost (MC) and Average Cost (AC).
- If MC is less than AC, AC falls.
- If MC is greater than AC, AC rises.
- If MC equals AC, AC reaches its lowest point.
Step 2: Apply this principle to the problem.
The marginal cost curve intersects the average cost curve precisely at the average cost's minimum.
Final Answer: \[\boxed{\text{At the minimum of the average cost curve.}}\]