# A firm is productively efficient if it produces at the minimum point of its: a. average variable...

## Question:

A firm is productively efficient if it produces at the minimum point of its:

a. average variable cost curve.

b. marginal cost curve.

c. average total cost curve.

d. total cost curve.

## The Average Total Cost:

The average total cost is a curve that gives the average per-unit cost of producing a given volume of output. The average total cost curve is a parabola that opens upwards and has the marginal cost cutting it at its minimum point.

## Answer and Explanation: 1

Become a Study.com member to unlock this answer! Create your account

View this answer

The correct answer is: __c. average total cost curve.__

The minimum efficient scale is the point at the minimum of the average total cost. When a firm...

See full answer below.

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 9 / Lesson 4Define economies of scale and diseconomies of scale. Compare economies of scale and diseconomies of scale using the graph and subsequent examples. Learn about the various causes of diseconomies of scale.

#### Related to this Question

- A firm's supply curve corresponds to: a. the average total cost curve. b. the marginal cost curve above the minimum variable cost curve. c. the average variable cost curve. d. the marginal cost curve.
- In the short run, the marginal cost curve crosses the average total cost curve at: A. a point just below the average fixed cost curve. B. the minimum point of the average total cost curve. C. the maxi
- A perfectly competitive firm's supply curve is its: a) marginal cost curve above the minimum of its average fixed cost. b) marginal cost curve above its minimum average variable cost. c) marginal co
- A competitive firm's short-run supply curve is its cost curve above its cost curve. a. average total cost, marginal b. average variable, marginal c. marginal, average total d. marginal, average variable
- When the average total cost curve is at its minimum, we know that the: a. marginal cost curve is above the average total cost curve. b. marginal cost curve intersects the average total cost curve. c. average fixed cost curve is above the marginal cost
- A firm's short-run supply curve is equal to the firm's: a. marginal cost curve above minimum average total cost (ATC). b. demand curve. c. marginal revenue curve. d. marginal cost curve below minimum average variable cost (AVC). e. marginal cost curv
- A competitive firm's short-run supply curve is its cost curve above its cost curve. a. average total, marginal b. average variable, marginal c. marginal, average total d. marginal, average variable
- A competitive firm's short-run supply curve is its ...................... cost curve above its ...................... cost curve. a. average variable, marginal b. average total, marginal c. marginal, average total d. marginal, average variable
- The short-run supply curve for a perfectly competitive firm is given by: a. the entire marginal cost curve. b. the marginal cost curve at and above average variable cost. c. the marginal cost curve at and above average total cost. d. the average variable
- A competitive firm's short-run supply curve is its ________ cost curve above its ________ cost curve. 1) average total, marginal 2) average variable, marginal 3) marginal, average total 4) margina
- The marginal cost curve passes through the _ points of the _ cost curve and the _ cost curve. a. maximum; total cost; total variable b. minimum; average total; average variable c. minimum; average var
- A firm short-run supply curve is equal to the firm's (a) marginal revenue curve (b) demand curve (c) marginal cost curve above minimum average total cost (ATC) (d) marginal cost curve below minimum average variable cost (AVC) (e) marginal cost curve above
- A firm short-run supply curve is equal to the firm's a) marginal revenue curve. b) demand curve. c) marginal cost curve above the minimum average total cost (ATC). d) marginal cost curve below the minimum average variable cost (AVC). e) marginal cost curv
- The marginal cost curve is the short-run supply curve: a. as long as the firm is operating. b. as long as the firm is not operating. c. at all points. d. only above minimum average total cost (ATC). e. only between minimum average total cost (ATC) and min
- 1. The supply curve for this perfectly competitive firm is the segment of the: A) average total cost curve above point D. B) average variable cost curve above point C. C) marginal cost curve above p
- The supply curve of a perfectly competitive firm is: a. nonexistent. b. the average total cost curve only if price exceeds average variable cost. c. the marginal cost curve only if price exceeds average total cost. d. the marginal cost curve only if p
- The short-run supply curve for a firm in a perfectly competitive industry is its: A. average cost curve B. average variable cost curve C. marginal cost curve above the lowest point of the average variable cost curve D. marginal cost curve above the lowest
- A competitive firm short-run supply curve intersects its average total cost curve at the point (Q=450, P=$22). What is the value of the marginal cost at Q=450?
- The marginal cost curve intersects the average variable cost curve at the value of the average variable cost curve. a. maximum b. minimum c. zero d. average
- A perfectly competitive firm's supply curve follows the upward sloping segment of its marginal cost curve above the a. average total cost (ATC) curve. b. average variable cost (AVC) curve. c. average fixed cost (AFC) curve. d. average price (APC) curv
- 1. The short-run supply curve of a perfect competitor is its a. average variable cost curve. b. marginal revenue curve. c. entire marginal cost curve. d. MC curve above the minimum point on AVC. 2. An
- For a single profit-maximizing, perfectly competitive firm the MC (marginal cost) curve and the ATC (average total cost) curve intersect a. at the MC curve's minimum point b. at the MC curve's maxim
- The short-run supply curve for a firm in a perfectly competitive industry is: a. Its entire marginal cost curve b. Its average variable cost curve above, c. Its marginal cost curve, b. Its average total cost curve above, d. Its marginal cost curve a
- Each point on the long-run average cost curve is a: 1. minimum point on some short-run average cost curve as well. 2. level of average cost that is the lowest possible average cost for that level of output. 3. point on the long-run marginal cost curve as
- The minimum point on the Blank is the least cost combination. a. average cost curve. b. average variable cost curve. c. marginal revenue curve. d. marginal cost curve.
- For a firm in monopolistic competition, the marginal cost curve intersects the average total cost curve A. at no point. B. at the minimum average total cost. C. to the left of the minimum average total cost. D. to the right of the minimum average total co
- The marginal cost curve intersects the average variable cost curve at the {Blank} value of the average variable cost curve. A. maximum B. minimum C. zero D. average 2. Marginal cost is {Blank} average variable cost when {Blank} A. equal to; average total
- The short-run supply curve of a perfectly competitive firm: a. Intersects the minimum point of both its short-run average variable cost and its short-run average total cost curves, b. Intersects the minimum point of its short-run average variable cost cur
- When the average total cost curve is at its minimum? a. average variable cost curve intersects the average total cost curve. b. average variable cost curve is above the average total cost curve. c. ma
- When average total cost is at its minimum point: a. Marginal cost is also at its minimum point, b. Marginal cost is equal to zero, c. Marginal cost is constant, d. Average total cost is equal to marginal cost, e. The firm is maximizing profit.
- A firm's short-run supply curve is part of which of the following curves: a. Marginal revenue, b. Average variable cost, c. Average total cost, d. Marginal cost.
- The marginal cost curve passes through the average variable cost curve at the point of: a. maximum marginal cost. b. minimum average variable cost. c. minimum marginal cost. d. maximum average variable cost.
- For any given price, a firm in a competitive market will maximize profit by selecting the level of output at which price intersects the: a. marginal cost curve b. marginal revenue curve c. average total cost curve d. average variable cost curve
- A perfectly competitive firm's short-run supply curve is the a. average total cost curve. b. demand curve above the marginal revenue curve. c. same as the market supply curve. d. marginal cost curve above the average variable cost curve.
- A perfectly competitive firm incurs a loss in the short run, if at the profit maximizing level of output: a. the average revenue curve lies below the average cost curve b. the marginal revenue curve lies above the marginal cost curve c. the marginal reven
- A profit-maximizing firm in a competitive market is currently producing 200 units of output. It has an average revenue of $9 and an average total cost of $7. It follows that the firms: a. Average total cost curve intersects the marginal cost curve at an
- The short-run supply curve of a perfectly competitive firm is: A. it is average fixed cost curve. B. the part of its marginal cost curve rising above the average variable cost curve. C. the part of its marginal cost curve below the average variable cost c
- If a firm is producing the level of output at which average total cost equals marginal cost, then: a. Marginal cost is at its minimum point. b. Average total cost is at its minimum point. c. Total cos
- A price-taking firm's short-run supply curve is a. the portion of its marginal cost curve above the average variable cost curve. b. its average total cost curve. c. its average variable cost curve. d. its entire marginal cost curve. e. none of the ab
- Marginal cost is the slope of the: a. variable cost curve. b. total product curve. c. marginal curve. d. average cost curve.
- If the marginal product curve is intersecting the average product curve, we know that a. The average total cost curve lies below the marginal cost curve. b. The average variable cost curve is intersec
- A perfectly competitive firm should shut down in the short run if price falls below the minimum of: A) average variable costs. B) marginal revenue. C) average total cost. D) fixed costs. E) marginal cost.
- Consider a firm that produces output in a perfectly competitive market. The firm's total cost curve takes the form of TC=100+10Q+Q^2 and marginal cost takes the form MC=10+2Q. The point of the minimum average total cost is Q=10. a. If the market price is
- The marginal cost curve intersects the average total cost curve at the level of output where the average total cost is at a minimum because: A. the firm begins experiencing economies of scale at this quantity. B. when the marginal cost of the last unit pr
- The marginal cost curve will cut which of the following curves at its respective minimum point? (A) the average total cost curve (B) the average variable cost curve (C) the average fixed cost curve
- A firm shuts down if the price is? A) below average total cost. B) above minimum average fixed cost. C) below minimum average variable cost. D) above minimum average variable cost. E) less than marginal cost.
- A firm shuts down if price is: A) below average total cost. B) above minimum average fixed cost. C) below minimum average variable cost. D) above minimum average variable cost. E) less than marginal cost.
- A firm shuts down if price is: A) above minimum average variable cost. B) below minimum average variable cost. C) above minimum average fixed cost. D) less than marginal cost below average total cost.
- Each potential short-run average total cost curve is tangent to the long-run average cost curve at a. the level of output that minimizes short-run average total cost. b. the minimum point of the average total cost curve. c. the minimum point of the long-r
- A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has an average revenue of $10, and its average total cost is $8. It follows the firms: a. Average total cost curve intersects the marginal cost curve at an out
- A purely competitive firm's short-run supply curve is: A. the upward sloping portion of its average cost curve. B. the upward sloping portion of its average variable cost curve. C. its marginal cost curve above average variable cost. D. its average variab
- Graph the marginal cost, average variable cost, average total cost, and average fixed cost of a firm.
- Marginal cost is the slope of the: a. variable cost curve. b. total product curve. c. marginal product curve. d. average cost curve.
- As the price of a good fluctuates, a profit-maximizing firm will expand or contract production along its: a. average cost curve b. average product curve c. marginal cost curve d. marginal product curve
- When a firm is experiencing diseconomies of scale, long-run: a. average total cost is minimized, b. average total cost is greater than the long-run marginal cost, c. average total cost is less than the long-run marginal cost, d. marginal cost is minimi
- A firm shuts down if price: a. is above minimum average variable cost. b. is above minimum average fixed cost. c. is below average total cost. d. is below minimum average variable cost. e. is less than marginal cost.
- If the long-run average cost curve continuously slopes upward as output rises, minimum efficient scale would be? a) nonexistent. b) at the midpoint of the long-run average cost curve. c) zero. d) a
- The loss minimization point for a firm is: A. when at the minimum point on the average total cost curve B. when at the minimum point on the average variable cost curve C. where marginal cost equals marginal revenue D. when total revenue is maximized
- The perfectly competitive firm will seek to produce the level of output for which: A. average total cost is at a minimum. B. average fixed cost is at a minimum. C. marginal cost equals marginal revenue. D. average variable cost is at a minimum.
- Determine the marginal cost, short-run average cost curve, and the long-run average total cost curve.
- When the marginal cost curve lies below the average cost curve, ________. a. the average cost curve slopes downward. b. the marginal cost curve is horizontal. c. the marginal cost curve is vertical. d. the average cost curve slopes upward.
- The perfectly competitive firm's supply curve: a. is the firm's average total cost curve above the shutdown point. b. is the firm's marginal cost curve above the minimum point on the AVC curve. c. coincides with its perfectly elastic demand curve. d. is p
- Marginal cost is the slope of the: a. variable cost. b. total product curve. c. marginal product curve. d. average cost curve.
- A firm's cost curve is TC(q) = 250 + 10q + 2q^2, q is the quantity produced. What is the firm's marginal cost (MC), average variable cost (AVC), and average total cost (ATC)?
- The firm's LRATC curve illustrates the relationship between output and: A) average total cost when marginal cost has been chosen to minimize average total cost for each level of output. B) marginal cost when fixed cost has been chosen to minimize average
- In the case of perfect competition, the firm's marginal cost curve: A) traces out the firm's supply curve. B) coincides with the firms total profit curve. C) is exactly the same as the firm's average total cost curve. D) tells us exactly how many workers
- A perfectly competitive firm has the following short-run total cost. Calculate the firm's marginal cost and, for all output levels except zero, the firm's average variable cost and average total cost.
- If the minimum points of all possible short-run average total cost curves become successively lower as quantity of output increases, a. the firm should try to produce less output. b. total fixed costs are constant along the LRAC curve. c. there are eco
- The short-run marginal cost of a good generally _______. (a) intersects the maximum points of both the average variable cost and the average total cost curves (b) falls for a time, but then begins to rise when the point of diminishing returns is reached (
- The perfectly competitive firm's supply curve is the marginal cost curve above or equal to the average variable cost.
- Each potential short-run average total cost curve is tangent to the long-run average cost curve at: a. the level of output that minimizes short-run average total cost. b. the minimum point of the average total cost curve. c. the minimum point of the long-
- The short-run supply curve is the A. marginal cost curve above the break-even price. B. average variable cost curve above the shut-down price. C. marginal cost curve above the shut-down price. D. average variable cost curve above the break-even price.
- A firm has the short-run total cost function C(q)=100+10q-2q^2+q^3. a) Derive the equations for average total cost, average fixed cost, average variable cost, and marginal cost. b) Derive the short-ru
- The marginal cost curve intersects the average variable cost curve at which point?
- When a firm is experiencing economies of scale, long-run: a. average total cost is minimized, b. average total cost is greater than long-run marginal cost, c. average total cost is less than long-run marginal cost, d. marginal cost is minimized.
- A firm's long-run total cost function is TC = q3 - 40q2 + 100q. 1) Calculate the average cost function. 2) At what level of output does average cost reach a minimum? 3) Calculate the marginal cost function. 4) Prove this marginal cost curve intersects
- When a perfectly competitive firm is in long-run equilibrium, the firm is producing at _ cost. a. Minimum long-run average total b. Minimum marginal c. Maximum average total d. Maximum average variabl
- a. A competitive firm has a short run total cost curve represented by the following equation: C(q) = 50 + .05q2 Derive the marginal cost. Derive the expressions for average total cost and average vari
- 1. a.) A competitive firm has a short run total cost curve represented by the following equation:C(q) = 50 + .05q^2 Derive the marginal cost. Derive the expressions for average total cost, average va
- Short-run profit maximization for a perfectly competitive firm occurs when the firm's marginal cost equals a. average total cost. b. average variable cost. c. marginal revenue. d. All of the answers above are correct.
- At the level of output where marginal revenue equals marginal cost, assume that the price of a competitive firm's product is between the firm's average total cost curve and its average variable cost curve. In this case, the firm would: a) decrease output
- The marginal cost curve intersects the average variable cost curve at the level of output where average variable cost is at a minimum because: A. the firm begins benefiting from division of labor at this quantity. B. when the marginal cost of the last un
- A perfectly competitive firm is is currently producing at a point at which price is $10 and both marginal cost and average variable cost are $7. To maximize profit or minimize loss in the short run, this firm should do what?
- In the short run, a perfectly competitive firm will shut down if the price is less than: a. average total cost b. average variable cost c. marginal cost d. total cost e. average fixed cost
- Suppose a firm's long run total cost curve is given by: TC = 1000-30Q^2+Q^3 a. What is the average cost function and the minimum efficient scale of the firm? b. Determine over what range of output the average cost shows economies of scale and over what ra
- If the minimum points of all possible short-run average total cost curves become successively lower as the quantity of output increases: a. the firm should try to produce less output. b. total fixed costs are constant along the LRAC curve. c. there are
- A firm will go out of business if the price is below: A. marginal cost B. marginal revenue C. average total cost D. average fixed cost
- A perfectly competitive firm will not produce any output in the short run and will shut down if price is: a. greater than marginal cost. b. less than marginal cost. c. less than average variable cost. d. greater than average variable cost and less tha
- The marginal cost curve intersects the average total cost (ATC) curve: a. at the ATC curve's maximum point. b. only when the ATC curve is sloping downward. c. when the ATC curve intersects the fixed cost curve. d. at the ATC curve's minimum point. e. on
- In the short run in perfect competition, a firm will shut down when: a. marginal revenue equals marginal cost. b. price is below average total cost. c. price is below average variable cost. d. economic profit is zero.
- The marginal cost curve: A. lies always below the average total cost curve (ATC). B. intersects the ATC and AVC at their minimum points. C. intersects the ATC and AVC at their maximum points. D. lies always above the average variable cost curve (AVC).
- A firm's output is 80 units, its marginal cost is $42, its average variable cost is also $42, and its average fixed cost is $10. The slope of its average fixed cost curve is A. positive but the precise slope cannot be calculated. B. positive and the slope
- 1. In a competitive market, the individual supply curve of a competitive firm is based on its a. Average revenue curve b. Average total cost curve c. Marginal revenue curve d. Marginal cost curve 2. W
- Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, marginal cost must be a. greater than the average variable cost. b. less than the average variable cost. c. equal to the average variab
- In the long-run, the supply curve for a perfectly competitive firm is represented by: A. the portion of the marginal cost curve above average total cost. B. the portion of the marginal cost curve above average variable cost. C. the portion of the averag
- Marginal cost is average variable cost when. a. equal to; average total cost is minimized b. less than; total cost is maximized c. greater than; average fixed cost is minimized d. equal to; average variable cost is minimized
- A firm's marginal cost curve above the average variable cost curve is equal to the firm's individual supply curve. This means that every time a firm receives a price from the market it will be willing
- Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, the marginal cost must be: a. greater than the average variable cost. b. less than the average variable cost. c. equal to the averag
- Short-run profit maximization for a perfectly competitive firm occurs when firm's marginal cost equals a. average total cost. b. average variable cost c. marginal revenue. d. All of the above.
- When the average total cost curve is downward-sloping, what must be true about the marginal cost curve? a) It is U-shaped. b) It is a straight line. c) It is upward-sloping. d) It is below the average total cost curve. e) It is above the average total co