Marginal cost curve intersects average cost curve at ..........

Option 1 -> Incorrect, as MC intersects AC at its minimum point, not maximum.

Option 2 -> Correct, MC curve intersects AC curve at the minimum point of average cost.

Option 3 -> Incorrect, the curves do intersect at a specific point.

Option 4 -> Incorrect, intersection occurs specifically at the minimum point, not at any mid point.

Hence, Option 2: At minimum point of average cost curve -> This is a fundamental principle in microeconomics. When Marginal Cost (MC) is less than Average Cost (AC), it pulls the average down, making AC fall. When MC is greater than AC, it pushes the average up, making AC rise. Therefore, MC must intersect AC exactly at the point where AC transitions from falling to rising, which is the minimum point of the AC curve. At this point, MC = AC, and the AC curve reaches its lowest value before starting to increase. -> correct