Which of the following statements is correct?
rev: 06_26_2018
Multiple Choice
The marginal cost curve intersects the average variable cost curve at its lowest point.
If average variable cost is increasing, then average total cost must be increasing too.
The marginal cost curve intersects the average variable cost curve at a level of output greater than where the marginal cost curve intersects the average total cost curve.
Marginal cost is the change in the average fixed cost associated with a change in output of one unit.
The marginal cost curve intersects the average variable cost curve at its lowest point. : TRUE
(When MC is above AVC, MC is pushing the average up; therefore MC and AVC intersect at the lowest AVC.)
If average variable cost is increasing, then average total cost must be increasing too. : TRUE
( ATC = AFC + AVC )
The marginal cost curve intersects the average variable cost curve at a level of output greater than where the marginal cost curve intersects the average total cost curve. : FALSE ( The opposite happens because AVC is lower than ATC )
Marginal cost is the change in the average fixed cost associated with a change in output of one unit.: FALSE ( It is change in change in Total Cost )
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