In the theory of production and cost, the average total cost of a firm is minimized when the marginal cost curve cuts the average total cost curve at its?

Assessment: JAMB UTME - Economics - 1993 Subject: Economics

Question 1 Report

In the theory of production and cost, the average total cost of a firm is minimized when the marginal cost curve cuts the average total cost curve at its?
Answer Details
In the theory of production and cost, a firm aims to minimize its average total cost to maximize its profits. The average total cost is the total cost per unit of output. When the marginal cost curve cuts the average total cost curve at its lowest point, the firm achieves the lowest possible average cost per unit of output. This point is also known as the point of minimum efficient scale. Therefore, the correct answer is the "lowest point".
Read lesson note on The Theory Of Production (JAMB)
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