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Why does SMC curve cut the AC at its minimum? |
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Answer» SOLUTION :SMC curve cuts AC curve at its minimum. It is because, 1. When MC lt AC, AC falls 2. When MC gt AC, AC rises 3. Changes in AC depend on CHANGE in MC. When MC lies below AC, It pulls AC downwards and when MC lies above AC, it pulls AC upwards. As a result MC cuts AC at its minimum POINT. 
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