Question

Marginal cost is ________ average variable cost when ________. A) equal to; average total cost is minimized B) less than; total cost is maximized C) greater than; average fixed cost is minimized D) equal to; average variable cost is minimized

Answer 1

D) equal to; average variable cost is minimized

Step-by-step explanation:

Marginal cost is equal to average variable cost when average variable cost is minimized.

The relationship between marginal cost and average variable cost is identical to the relationship between marginal cost and average cost. Marginal cost is a cost of an extra unit and an average variable cost is a per-unit cost as the average is equal to extra unit cost when the average is minimum so the MC=AVC at a minimum of AVC.