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MC curve intersects AC curve at its _____ point and AVC curve at its _____ point.
Maximum, minimum
Minimum, Minimum
Minimum, maximum
Maximum, Maximum
- The Marginal Cost (MC) curve intersects the Average Cost (AC) curve at its minimum point.
- This is because when MC is below AC, AC is falling, and when MC is above AC, AC is rising.
- Therefore, they intersect at the lowest point of AC.
- Similarly, the MC curve also intersects the Average Variable Cost (AVC) curve at its minimum point.
- The reasoning follows the same logic as with the AC curve: below AVC MC causes it to decrease and above it, to increase.
- Option 1: Maximum, minimum – Incorrect, MC intersects at minimum points.
- Option 2: Minimum, Minimum – Correct for both intersections.
- Option 3: Minimum, maximum – Incorrect, both are minimum points.
- Option 4: Maximum, Maximum – Incorrect, both are minimum points.
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