Why does the SMC cut SAVC at its minimum point? – InterviewSolution

1.	Why does the SMC cut SAVC at its minimum point?
Answer» When the Short run Average Variable Cost (SAVC) is decreasing, the Short run Marginal Cost (SMC) also should decrease and when SAVC increases, the SMC should also increase but more than SAVC. Hence, the SMC curve has to cut SAVC from below at the minimum point.

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