A situation where AVC is at a minimum can be associated with a situation where the firm is producing the output level where MR equals MC.
In economics, a situation where AVC (Average Variable Cost) is at a minimum can be associated with a situation where the firm is producing the output level where MR (Marginal Revenue) equals MC (Marginal Cost). At this output level, the firm is minimizing its variable costs per unit of output, resulting in the lowest AVC. For example, if a firm operates in a perfectly competitive market and wants to maximize its profits, it will produce the quantity of output where MR = MC, which also corresponds to the minimum AVC.