The marginal cost curve crosses the average total cost curve at the
a. highest level of average total cost.
b. lowest level of average total cost.
c. point where the ATC equals the AVC.
d. point where the ATC equals the AFC.
b. lowest level of average total cost.
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Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged. C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
"A firm should continue to hire more workers as long as wages are low." Do you agree or disagree? Why?
What will be an ideal response?
Suppose the foreign exchange market is in equilibrium. Then, the U.S. government increases borrowing, causing American interest rates to increase. What will happen to the price of the Japanese yen? Why?
What will be an ideal response?
The government should not attempt to balance the budget if
a. the economy is in a recessionary gap. b. actual GDP is below full-employment GDP. c. unemployment is rising. d. All of the above are correct.