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C1Q1 - the point of Minimum the Marginal Cost Curve MC...

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C1Q1 = F1Q1 + V1Q1 The lowest point on ATC is C2. Around this point ATC remains constant for a moment. To the left of C2 ATC falls (C1C2) and to its right ATC rises (C2C3). ATC thus shows the three stages of cost behavior, namely, the Diminishing, the Minimum (Constant) and the Increasing Cost Phases. The lowest point on ATC is C2 2
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Unformatted text preview: the point of Minimum, the Marginal Cost Curve MC intersects ATC. This is essential since MC is in addition to Variable Cost. So long as MC rises but remains below ATC the ATC falls. When MC crosses ATC and is above ATC it causes a rise in the value of ATC as well as an upward shift in the curve....
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