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JAMB Economics 2006 Question 44

Question 44

Theory of Costs and Revenue

If the short-run cost curve of a firm is U-shaped, the marginal and average costs are equal where the

  1. A.average variable cost is minimum
  2. B.marginal cost is falling
  3. C.average cost is minimum
  4. D.average fixed cost is falling
Show the answer and explanation

Answer: C (average cost is minimum)

Explanation

The marginal cost curve cuts the average cost curve at its lowest point.