PRC-3 · Chapter 12 · Question 36 of 69
On a standard short-run cost diagram, at what exact mathematical point does the Marginal Cost (MC) curve intersect the Average Total Cost (ATC) curve?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The minimum point of the ATC curve
Explanation
The relationship between marginal and average values dictates that the marginal cost curve always cuts through the average total cost curve exactly at its lowest (minimum) point.
More Firm Theory MCQs
- Q38A multinational corporation grows so incredibly large that management loses control, internal communication breaks down, and extreme…
- Q39A software startup spent Rs. 5 million on a failed marketing campaign. The money is gone and cannot be recovered. When making future…
- Q40Which of the following is a classic example of a 'Variable Cost' in a commercial bakery?
- Q41In the first stage of the law of variable proportions, adding more workers allows them to divide tasks and specialize, making the factory…
- Q42A firm breaks even exactly, covering all its explicit accounting costs plus the opportunity cost of the entrepreneur's time and capital…