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Economics (AS & A Level) · May / June 2021 · Paper 31 · Question 10

9708Types of cost, revenue and profit, short-run and long-run production

The diagram shows a firm's short-run total cost curve (TC). Which statement is correct?

  1. AAverage total cost is minimised at output OQ2.
  2. BAverage variable cost is minimised at output OQ1.
  3. CAverage variable cost is minimised at output OQ3.
  4. DMarginal cost is minimised at output OQ1.

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Correct answer: D. Marginal cost is minimised at output OQ1.

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