Marginal Cost Average Total Cost - Fundamental Finance Eventually they intersect, then MC continues to increase and pulls ATC up after it A firm's marginal cost curve also acts as its supply curve Read The Supply Curve article to get a more detailed explaination of why this is so
Why is MC = ATC the same point for both the breakeven point . . . The point at which marginal cost equals average total cost (MC = ATC) is known as the break-even point When the MR = P line crosses through this point, as is highlighted by the black circle on the graph, the product is said to be selling at its break-even price because the marginal revenue will exactly offset the marginal cost of production
Marginal Cost (MC), Average Total Cost (ATC), and Average . . . The interplay between MC, ATC, and AVC is crucial for understanding cost structures MC and ATC: When MC is below ATC, it pulls the ATC down Conversely, when MC is above ATC, it pushes the ATC up The point where MC intersects ATC is the minimum point of the ATC curve
Marginal cost: Understanding the Relationship Between Average . . . 3 Relationship between ATC and MC The marginal cost curve intersects the average total cost curve at its lowest point This intersection occurs where the marginal cost is equal to the average total cost When MC is below ATC, producing an additional unit of output reduces the average total cost
Chapter 11 Study Guide Questions Flashcards - Quizlet MC and ATC Intersection: The MC curve intersects the ATC curve at its lowest point because when MC is less than ATC, producing additional units lowers the ATC When MC is greater than ATC, producing additional units raises the ATC
ATC Curve - Economics Online The ATC curve and MC curve are related to each other as the ATC curve first slops downward, but when it meets or intersects the MC curve, it has its minimum point, after which it starts increasing with the increasing quantity of output produced
Living Economics: Marginal Cost and Average Total Cost . . . Since the slope of this tangency measures both MC and ATC, MC therefore intersects ATC at ATC's minimum point 2 ATC has a symmetric U-shape because two points on opposite sides of the minimum ATC point on TC have equal slopes