Please help me... I have a question from my teacher : Prove the average cost and marginal cost intersect at the minimum average cost!  

Asked on by suryadi0280

1 Answer | Add Yours

gopikrishna's profile pic

gopikrishna | High School Teacher | (Level 1) Valedictorian

Posted on

The short-run marginal cost (MC) curve will at first decline and then will go up at some point, and will intersect the average total cost and average variable cost curves at their minimum points.
The average variable cost (AVC) curve will go down (but will not be as steep as the marginal cost), and then go up. This will not go up as fast as the marginal cost curve.
The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.
The average total cost (ATC) curve initially will decline as fixed costs are spread over a larger number of units, but will go up as marginal costs increase due to the law of diminishing returns.


We’ve answered 319,814 questions. We can answer yours, too.

Ask a question