Question

At the point where average variable cost reaches its minimum value

A) marginal cost also reaches its minimum value.
B) average variable cost equals marginal cost.
C) marginal cost equals zero.
D) average variable cost equals average total cost.

Answer 1

Answer: B) average variable cost equals marginal cost.

Explanation: Average variable cost, AVC, is the total amount of variable cost per unit of output. This allows a company to see what the total cost and sales amount needs to be completed to zero out any variable cost out of pocket and where they are able to start earning a profit on their items.