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JAMB Economics 1983 Question 13

Question 13

Theory of Costs and Revenue

Marginal cost curve intersects average cost curve

  1. A.from above at its lowest point
  2. B.from below before the lowest point
  3. C.from below at its lowest point
  4. D.from below after the lowest point
  5. E.at zero point.
Show the answer and explanation

Answer: C (from below at its lowest point)

Explanation

While MC is below AC it pulls AC down; once MC rises above AC it pulls AC up. So MC cuts AC from below at AC's lowest point.