Asked by Ebba Maria Stillman on Jul 05, 2024
Verified
The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero.
Marginal-Cost Curve
A graph that displays the cost of producing one additional unit of a good or service.
Average-Total-Cost Curve
A graph that displays the mean total cost of manufacturing across various output quantities, generally characterized by a U-shape because of the effects of economies and diseconomies of scale.
- Discern the correlation between marginal cost and average total cost, and how it directs the making of production decisions.
Verified Answer
DS
dhruv sonavaneJul 06, 2024
Final Answer :
False
Explanation :
The marginal-cost curve intersects the average-total-cost curve at the output level where average total costs are at their minimum, not where average fixed costs are zero. Average fixed costs approach zero as output increases, but they never actually reach zero.
Learning Objectives
- Discern the correlation between marginal cost and average total cost, and how it directs the making of production decisions.
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