The average total cost curve is U-shaped. At the quantity of output where average total cost is at its minimum, is the marginal cost curve above the average total cost curve,
below the average total cost curve, or intersecting the average total cost curve?
When the average total cost is at its minimum, the average total cost equals the marginal cost. Therefore at the quantity of output where the average total cost is at its minimum, the marginal cost curve intersects the average total cost curve.
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If the growth of the quantity of money is 5 percent per year, potential and real GDP grow at 3 percent per year, and velocity does not change, in the long run what is the inflation rate?
What will be an ideal response?
Sears and Wal-Mart must decide whether to lower their prices, based on the economic profits shown in the table above. Which of the following is TRUE?
A) This situation is not a prisoners' dilemma. B) If Sears lowers its prices and Wal-Mart does not, Sears will make a $20 million economic profit. C) If Wal-Mart lowers its prices, Sears should keep its prices high. D) Both Sears and Wal-Mart would jointly be better off if they could each keep their prices high.
A monopoly's output decision depends only on the shape of its marginal cost curve
Indicate whether the statement is true or false
Judging from the circular flow diagram, which of the following might be sold in a factor market?
a. a gourmet meal
b. the services of a medical doctor
c. automobiles
d. admission to an amusement park