Although ATC has the same general shape as AVC, it can be seen from Figure 5.5b to
reach a minimum at a higher level of output. AVC is minimised at output Q2, ATC is
minimised at Q3. The reason is that although AVC increases from Q2 to Q3, the rate of
increase is outweighed by falling AFC. As a result, ATC continues to fall. At Q3, the rate
of increase in AVC is matched by the decline in AFC, and ATC therefore reaches a minimum.
Beyond Q3, ATC rises because AVC is increasing faster than AFC is falling.