Show that for a profit-maximizing firm producing at its optimal quantity, y∗, its average total costis minimized when marginal cost is equal to average total cost. Some tips to get you started: •Say the firm’s profit function is π=py∗−c(y∗). What is average total cost? •Find the first order condition that will show when average total cost is minimized. Use thefirst order condition to arrive at the desired conclusion.

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