When the average total cost curve is at its minimum, we know that the

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Question restatement: When the average total cost (ATC) curve is at its minimum, we know that the concept being tested relates to relationships between cost curves in microeconomics.
Option a: 'average variable cost curve intersects the average total cost curve.' In standard cost theory, the ATC curve is composed of AFC (which declines) and the AVC curve (which typically declines at first and then rises). The ATC curve reaches its minimum at the point where ATC is tangent to MC, and this occurs where MC intersects ATC, not where AVC intersects ATC. So this statement is incorrect because the intersection of ATC and AVC does not characterize the ATC minimum.
Option b: 'average variable cost curve is above the average total cost curve.' If AVC were above ATC, that would imply AVC > ATC, which is impossible since ATC includes AVC as a component plus fixed costs per unit. Therefore, this situation cannot occur and the option is false.
Option c: 'marginal cost curve intersects the average total cost curve.' This is a key result in cost theory: ATC is minimized where MC = ATC. At that intersection, the slope of the ATC curve changes from decreasing to increasing, marking the minimum. This statement correctly identifies the standard condition for ATC minimum.
Option d: 'marginal cost curve is above the average total cost curve.' If MC were consistently above ATC, ATC would be rising everywhere and would not have a clean minimum tied to an intersection. Moreover, the classic result is about MC crossing ATC at the minimum, not a general statement about MC staying above ATC. Therefore, this option is incorrect.
In summary, the analysis shows that only the relationship described in option c aligns with the established result that ATC is minimized where marginal cost equals average total cost, while the other options contradict fundamental properties of the cost curves.

MCD2020 - T1 - 2025 Lecture Quiz 6 - Cost of Production

When the average total cost curve is at its minimum, we know that the

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