Final answer:
The correct answer is A) Marginal cost intersects average variable cost at its minimum when average productivity of labor is maximum and equals marginal productivity of labor.
Step-by-step explanation:
When the average productivity of labor is maximum and equals the marginal productivity of labor, the correct answer is A) Marginal cost intersects average variable cost at its minimum. This is a fundamental concept in microeconomics that describes the behavior of cost curves in relation to productivity. At the point where marginal productivity is equal to average productivity (which is at the maximum), the marginal cost curve intersects the average variable cost curve at the average variable cost's minimum point. This can be visualized on a graph where the marginal cost curve passes through the lowest point of the average variable cost curve, often called the shutdown point. The rationale behind this is that when marginal productivity starts to decline (after its peak), the additional cost of producing one more unit, which is the marginal cost, begins to rise. Conversely, up until this point, as average productivity increases, the average variable cost decreases.