Why does the marginal cost curve always intersect with the average total cost curve at its lowest point?

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The marginal cost curve always intersects the average total cost curve at its lowest point because the marginal cost of making the next unit of output will always affect the average total cost. As a result, so long as marginal cost is less than average total cost, average total cost will fall. Eventually, the marginal cost of producing another unit will be greater than the average total cost and then the average total cost curve will start to rise. 


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The marginal cost curve and the average total cost curve are both graphical representations of the changing cost of producing a product in business. The marginal cost measures the difference in cost of producing individual pieces or products, while the average total cost is just an overall average of how much each part cost.

As the marginal cost approaches the average total cost curve, the average total cost is decreasing, because it is still producing pieces at a value less than the average total cost. However, there comes a point when average total cost is equal to marginal cost, which is...

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