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: Recall the relationship between AC and MC.
- When \(MC<AC\), average cost decreases.
- When \(MC>AC\), average cost increases.
- When \(MC = AC\), average cost is at its minimum point.
Step 2: Apply to the question.
The marginal cost curve always cuts the average cost curve at its minimum point.
Final Answer: \[ \boxed{\text{At minimum point of average cost curve.}} \]