Question

Ishaan says,
24. Ishaan, Piyush and Bhavya are three friends talking about the relationship between
marginal cost (MC) and average cost (AC).
"MC curve intersects AC curve from above"
• Bhavya says, "MC curve does not intersect AC curve at all".
• Piyush says, "MC curve intersects AC curve from below".
Out of the three, who is correct?
(a) Piyush
(b) Ishaan
(c) Bhavya
(d) All of them​

Answer 1

Answer:

Piyush is correct.

When MC is less than AC, AC falls with increase in the output, i.e. till 3 units of output. 2. When MC is equal to AC, i.e. when MC and AC curves intersect each other at point A, AC is constant and at its minimum point. ... When MC is more than AC, AC rises with increase in output, i.e. from 5 units of output.

Explanation:

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