Which curve intersects with MC at the minimum point of the average variable cost curve?

• A. The average variable cost curve
• B. The marginal revenue curve
• C. The average fixed cost curve
• D. The average total cost curve

Answer: (A)

The key idea is that the marginal cost curve intersects the average variable cost curve at the point where AVC is minimized. If producing one more unit costs less than the current average variable cost, AVC falls; if it costs more, AVC rises. The tipping point where these forces balance is when MC equals AVC, which occurs at AVC’s minimum. So the intersection happens with the average variable cost curve. The other curves don’t fit this specific relationship: marginal revenue concerns revenue, not cost; average fixed cost falls continuously and has no minimum; average total cost has its minimum where MC equals ATC, not at AVC’s minimum.