The graph shows the usual short-run cost curves. As output rises, in what order are the minimum points of MC, AVC and AC reached? Short-run cost curves from the schedule. MC is 30, 20, 16, 14, 20, 32, 50 for the 1st to 7th unit, lowest at 14 for the 4th. AVC is 30, 25, 22, 20, 20, 22, 26, lowest at 20 for 4 and 5 units. AC (from 2 units) is 55, 42, 35, 32, 32, 34.57, lowest at 32 for 5 and 6 units. AFC falls from 30 at 2 units to 8.57 at 7. MC meets AVC at P (5 units, ₹20) and AC at Q (6 units, ₹32).

The graph shows the usual short-run cost…

The graph shows the usual short-run cost curves.

Question 47

MediumOriginal question

The graph shows the usual short-run cost curves. As output rises, in what order are the minimum points of MC, AVC and AC reached?

Short-run cost curves from the schedule. MC is 30, 20, 16, 14, 20, 32, 50 for the 1st to 7th unit, lowest at 14 for the 4th. AVC is 30, 25, 22, 20, 20, 22, 26, lowest at 20 for 4 and 5 units. AC (from 2 units) is 55, 42, 35, 32, 32, 34.57, lowest at 32 for 5 and 6 units. AFC falls from 30 at 2 units to 8.57 at 7. MC meets AVC at P (5 units, ₹20) and AC at Q (6 units, ₹32).

Minimum AC, then minimum AVC, then minimum MCCorrect answerYour answerMinimum MC, then minimum AVC, then minimum ACCorrect answerYour answerAll three at the same outputCorrect answerYour answerMinimum AVC, then minimum MC, then minimum ACCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

MC turns up first. AVC keeps falling until rising MC reaches it, and AC until MC reaches it.

Concept: Order of the minimum points
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe shapes of the cost curves

Practise this chapter →

Ten questions from Cost Curves, at your own pace.

Practise this chapter →

Ten questions from Cost Curves, at your own pace.

The graph shows the usual short-run cost curves.

Question 47

Explanation