Answer to Question #197307 in Microeconomics for Amahle Ndlovu

Question

8. Which of the following statement(s) is/are correct about firm costs? [1] The marginal cost is always less than the average total cost. [2] The marginal cost is always more than the average variable cost. [3] As output increases, the gap between average total and average variable cost widens. [4] The marginal cost cuts the average variable and average total costs at their minimum.

Answer 1

The correct answer is [4] The marginal cost cuts the average variable and average total costs at their minimum.