ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Correct answer is B. Average total cost (ATM) is minimized by producing the level of output at which marginal cost curve intersects the average total cost curve. Correct answer is B.

Detailed explanation-2: -∴ If marginal cost equals average total cost average total cost is minimized.

Detailed explanation-3: -The marginal cost curve always intersects the average total cost curve at its lowest point because the marginal cost of making the next unit of output will always affect the average total cost. As a result, so long as marginal cost is less than average total cost, average total cost will fall. Was this answer helpful?

Detailed explanation-4: -c) To determine the quantity to be produced in order to minimize the average total costs we have to calculate the quantity that makes marginal costs equal average total costs. So, ATC is minimized at 50 units of output.