Asked by Rosiee Adwoa on Jul 30, 2024
Verified
In general,if marginal cost is EQUAL to average total cost:
A) average total cost is increasing.
B) average total cost is at its maximum.
C) average total cost is at its minimum.
D) marginal cost is decreasing.
Marginal Cost
The leap in all-encompassing expenses associated with the production of an additional unit of a product or service.
Average Total Cost
The cost of producing everything, when divided by the number of units made, signifies the cost for each unit produced.
- Examine the relationship between marginal cost and average cost curves.
Verified Answer
ZK
Zybrea KnightAug 04, 2024
Final Answer :
C
Explanation :
When marginal cost is equal to average total cost, it means that producing one additional unit of output is costing the same as the average cost of all units produced so far. This indicates that the efficiency of production is at its highest point, resulting in the minimum possible average total cost. Therefore, the correct answer is C, average total cost is at its minimum.
Learning Objectives
- Examine the relationship between marginal cost and average cost curves.