Micro-Economics

define minimum-cost output

The minimum-cost output is the quantity of output at which average total cost is lowest—the bottom of the U-shaped average total cost curve
 
  • At the minimum-cost output, average total cost is equal to marginal cost
  • At output less than the minimum-cost output, marginal cost is less than average total cost and average total cost is falling
  • And at output greater than the minimum-cost output, marginal cost is greater than average total cost and average total cost is rising

Discussion