## What is the relationship between the ATC curve and the MC curve?

The relationship between the ATC and MC. Whenever MC is less than ATC, ATC is falling. Whenever MC is greater than ATC, ATC is rising. When ATC reaches its minimum point, MC=ATC.

### Does MC curve cut ATC curve?

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.

#### Where does the MC curve cross the ATC curve?

The marginal cost curve intersects the average total cost curve exactly at the bottom of the average cost curve—which occurs at a quantity of 72 and cost of \$6.60 in Figure 1. The reason why the intersection occurs at this point is built into the economic meaning of marginal and average costs.

Is ATC the same as MC?

Average total cost (ATC) refers to total cost divided by the total quantity of output produced, . Marginal cost (MC) refers to the additional cost incurred by producing one additional unit of output, .

What is the relationship between MC and ATC and between MC and AVC?

When AVC and ATC are falling, MC must be below the average cost curves. When AVC and ATC are rising, MC must be above the average cost curves. Therefore, MC intersects the average cost curves at the average cost curves’ minimum points.

## What is the relationship between marginal cost and average total cost?

The relationship between the marginal cost and average cost is the same as that between any other marginal-average quantities. When marginal cost is less than average cost, average cost falls and when marginal cost is greater than average cost, average cost rises.

### What happens when ATC and MC intersect?

The point of intersection between the MC and AC curves is also the minimum of the AC curve. This can be explained by the fact that when the cost of the marginal output is equal to the average cost of the output, then the AC neither falls nor rises (i.e. it reaches its minimum).

#### What is the relationship between MC and ATC when MC cuts ATC at the minimum point of ATC?

We know that the marginal cost (MC) curve is upward sloping when it intersects with the average total cost (ATC) curve. So now let us think about why the MC curve must intersect with the ATC curve at the ATC’s minimum. When the MC is less than the ATC, each new unit of output lowers the the ATC.

What happens when MC intersects with ATC?

What is the relationship between the average total cost curve ATC and the marginal cost curve MC?

The MC is related to AVC and ATC. These costs will fall as long as the marginal cost is less than either average cost. As soon as the MC rises above the average, the average will begin to rise.

## When ATC is rising What is the relation between MC and ATC?

if MC is rising, ATC must be rising. if ATC is rising, MC must be less than ATC . if ATC is rising, MC must be greater than ATC. increase by 50%.

### What does it mean when MC is above ATC?

When MC is above ATC, ATC rises. Therefore, at the output level at which MC rises from below ATC to just above it, ATC ceases to decline and begins to rise. It follows, therefore, that ATC reaches its lowest point at the output level at which MC crosses ATC.