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Does marginal cost curve always intersect the average cost curve at the average cost curve's lowest point?
When the marginal cost is below the average total costs or the average variable costs,then the AC would be declining.When marginal cost is above the average cost then the average cost would be increasing.Therefore the marginal cost should intersect with the average cost at the lowest point in order to pull the average cost upwards.
What point does average cost curve is at its lowest point?
The average cost curve is at its lowest point when a firm achieves optimal production efficiency, where the average total cost (ATC) per unit of output is minimized. This point typically corresponds to the scale of production where the marginal cost (MC) equals the average cost (AC). At this juncture, the firm is effectively utilizing its resources, and any increase or decrease in production would result in higher average costs. This concept is crucial for firms in determining the most efficient scale of operation.
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
Why doe the marginal cost curve go through the lawest point of average cost curve?
as the total average cost is U shape the MC will intersect with U shape at lowest point to indicate the break even point where the company does not make neither profit nor loss. and this minimum point is known as the efficient scale that minimize the losses but does not maximize profit
The long run average total cost curve?
The long run average total cost curve is the lowest average total cost for producing each level of output. It depicts the per unit cost of producing a good or service in the long run when all inputs are variable.
What is the relationship between marginal cost and average cost curves?
Margianal cost curve crosses the average total cost curve at the lowest point on the average total cost curve to be socially and ecomonical efficient.
Does marginal cost curve always intersect the average cost curve at the average cost curve's lowest point?
When the marginal cost is below the average total costs or the average variable costs,then the AC would be declining.When marginal cost is above the average cost then the average cost would be increasing.Therefore the marginal cost should intersect with the average cost at the lowest point in order to pull the average cost upwards.
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
Why doe the marginal cost curve go through the lawest point of average cost curve?
as the total average cost is U shape the MC will intersect with U shape at lowest point to indicate the break even point where the company does not make neither profit nor loss. and this minimum point is known as the efficient scale that minimize the losses but does not maximize profit
The long run average total cost curve?
The long run average total cost curve is the lowest average total cost for producing each level of output. It depicts the per unit cost of producing a good or service in the long run when all inputs are variable.
Why the marginal cost curve always cut the average cost curve at its lowest point?
This is because if a marginal figure is less than an average figure, the new average figure will decrease.
What is the meaning of shutdown point?
The shutdown point is the output level at which total revenue is equal to the total variable cost. Here the product price is also equal to its average variable cost.
What is the lowest point on a firms short run supply curve?
The minimum is price=average cost below this price supply=0
Why does MC curve intersect AVC andATC fromits bottom?
The Marginal Cost (MC) curve intersects both the Average Variable Cost (AVC) and Average Total Cost (ATC) curves from below because when MC is less than AVC or ATC, it pulls the average down as additional units are produced. When MC equals AVC or ATC, it indicates that the cost of producing one more unit is exactly equal to the average cost, at which point the average costs are at their minimum. Thus, the intersection occurs at the lowest point of the AVC and ATC curves, illustrating the relationship between marginal and average costs.
When margine revenue equals margine cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
When marginal revenue equal to marginal cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
When marginal revenue equals marginal cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
