0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What happens to the difference between ATC and AVC as a firm's output expands?
The difference narrows. ATC is the sum of AVC and AFC.. Since AFC declines steadily as output rises, the difference between ATC and AVC must narrow steadily.
Why do MC intersect AVC and ATC from its bottom?
http://learning.mazoo.net/archives/000873.html Here's a helpful discussion of your question.
Are Fixed costs are the difference between total costs and average variable costs?
No. But: ATC = AVC + AFC Or TC = VC + FC
Why is average total cost curve above average variable cost curve?
The Average Total Cost (ATC) curve is above the Average Variable Cost (AVC) curve because the ATC is composed of the AVC and the AFC (average fixed cost curve). The AVC curve starts out low at low levels of output, and eventually, as more of the variable unit is added, AVC begins to slop upward. Conversely, AFC starts out higher, but as more units are produced, the fixed costs are spread out over more units so the AFC curve is actually a downward sloping straight line. When you add the AVC and AFC at each level of production and graph the result, you are given the ATC line which is a U-shaped curve above the AFC & AVC. An example of VC would be labor. In the short-run where plant size is fixed, in order to produce more units, you would have to hire more labor. As you add workers, you will initially see a productivity gain, but as more and more workers are added, their marginal output will fall. FC is simple. Suppose you have a factory that costs you $100/year to operate. If you produce only 1 unit that year, your fixed costs are spread out over the single unit, so $100 AFC. Now suppose you up production to 3 units and AFC falls to $33.34/unit. Go even further and produce 25 units and now AFC is $4/unit. Graph this line. The sum of these 2 curves, AVC & AFC, equals ATC.
Indicate how each of the following would shift 1. the marginal cost curve 2. the average variable cost curve 3. the average fixed cost curve and 4. the average total cost curve of a manufacturing firm?
a. Property taxes are fixed costs, so this would decrease AFC, which in turn decreases ATC.b. Wages are typically variable costs, so this would increase both MC and AVC, which in turn increases ATC.c. Electricity is typically a variable cost, so this would decrease both MC and AVC, which in turn decreases ATC,d. Insurance is a fixed cost, so this would increase AFC, which in turn increases ATC.
Why avc curve U shape?
Overall because of diminishing marginal returns. The marginal cost curve, MC, decreases until diminishing marginal returns set in and and it begins to increase. When the MC is below the AVC, the AVC must fall. When the MC is above the AVC, the AVC must rise. In otherwords, if the marginal cost is decreasing the average cost must be decreasing as well and vice versa.
What is format for videos for a psp?
Mp4 mp4-avc avi-mjpge mp4-avc mp4-avc （720×480）pmp pmp-avc
Where i can Download avc player for nokia 5233?
yes avc player.
Explain the cost- output relationship in the long- run?
A proper understanding of the nature and behavior of costs is a must for regulation and control of cost of production. The cost of production depends on money forces and an understanding of the functional relationship of cost to various forces will help us to take various decisions. Output is an important factor, which influences the cost.The cost-output relationship plays an important role in determining the optimum level of production. Knowledge of the cost-output relation helps the manager in cost control, profit prediction, pricing, promotion etc. The relation between cost and its determinants is technically described as the cost function.C= f (S, O, P, T ….)Where;C= Cost (Unit or total cost)S= Size of plant/scale of productionO= Output levelP= Prices of inputsT= TechnologyConsidering the period the cost function can be classified as (1) short-run cost function and (2) long-run cost function. In economics theory, the short-run is defined as that period during which the physical capacity of the firm is fixed and the output can be increased only by using the existing capacity allows to bring changes in output by physical capacity of the firm.1. Cost-Output Relation in the Short-RunThe cost concepts made use of in the cost behavior are Total cost, Average cost, and Marginal cost.Total cost is the actual money spent to produce a particular quantity of output. Total Cost is the summation of Fixed Costs and Variable Costs.TC=TFC+TVCUp to a certain level of production Total Fixed Cost i.e., the cost of plant, building, equipment etc, remains fixed. But the Total Variable Cost i.e., the cost of labor, raw materials etc., vary with the variation in output. Average cost is the total cost per unit. It can be found out as follows.­­­­­­­­AC=TC/QThe total of Average Fixed Cost (TFC/Q) keep coming down as the production is increased and Average Variable Cost (TVC/Q) will remain constant at any level of output.Marginal Cost is the addition to the total cost due to the production of an additional unit of product. It can be arrived at by dividing the change in total cost by the change in total output.In the short-run there will not be any change in Total Fixed C0st. Hence change in total cost implies change in Total Variable Cost only.Units of Output QTotal fixed cost TFCTotal variable cost TVCTotal cost (TFC + TVC) TCAverage variable cost (TVC / Q) AVCAverage fixed cost (TFC / Q) AFCAverage cost (TC/Q) ACMarginal cost MC0--60----16020802060802026036961830481636048108162036124606412416153116560901501812302666013219222103242The above table represents the cost-output relation. The table is prepared on the basis of the law of diminishing marginal returns. The fixed cost Rs. 60 May include rent of factory building, interest on capital, salaries of permanently employed staff, insurance etc. The table shows that fixed cost is same at all levels of output but the average fixed cost, i.e., the fixed cost per unit, falls continuously as the output increases. The expenditure on the variable factors (TVC) is at different rate. If more and more units are produced with a given physical capacity the AVC will fall initially, as per the table declining up to 3rd unit, and being constant up to 4th unit and then rising. It implies that variable factors produce more efficiently near a firm's optimum capacity than at any other levels of output and later rises. But the rise in AC is felt only after the start rising. In the table 'AVC' starts rising from the 5th unit onwards whereas the 'AC' starts rising from the 6th unit only so long as 'AVC' declines 'AC' also will decline. 'AFC' continues to fall with an increase in Output. When the rise in 'AVC' is more than the decline in 'AFC', the total cost again begin to rise. Thus there will be a stage where the 'AVC', the total cost again begin to rise thus there will be a stage where the 'AVC' may have started rising, yet the 'AC' is still declining because the rise in 'AVC' is less than the droop in 'AFC'.Thus the table shows an increasing returns or diminishing cost in the first stage and diminishing returns or diminishing cost in the second stage and followed by diminishing returns or increasing cost in the third stage.The short-run cost-output relationship can be shown graphically as follows.In the above graph the "AFC' curve continues to fall as output rises an account of its spread over more and more units Output. But AVC curve (i.e. variable cost per unit) first falls and than rises due to the operation of the law of variable proportions. The behavior of "ATC' curve depends upon the behavior of 'AVC' curve and 'AFC' curve. In the initial stage of production both 'AVC' and 'AFC' decline and hence 'ATC' also decline. But after a certain point 'AVC' starts rising. If the rise in variable cost is less than the decline in fixed cost, ATC will still continue to decline otherwise AC begins to rise. Thus the lower end of 'ATC' curve thus turns up and gives it a U-shape. That is why 'ATC' curve are U-shaped. The lowest point in 'ATC' curve indicates the least-cost combination of inputs. Where the total average cost is the minimum and where the "MC' curve intersects 'AC' curve, It is not be the maximum output level rather it is the point where per unit cost of production will be at its lowest.The relationship between 'AVC', 'AFC' and 'ATC' can be summarized up as follows:If both AFC and 'AVC' fall, 'ATC' will also fall. 'ATC' will fall where the drop in 'AFC' is more than the raise in 'AVC'.'ATC' remains constant is the drop in 'AFC' = rise in 'AVC''ATC' will rise where the drop in 'AFC' is less than the rise in 'AVC'When 'AFC' falls and 'AVC' rises2. Cost-output Relationship in the Long-RunLong run is a period, during which all inputs are variable including the one, which are fixes in the short-run. In the long run a firm can change its output according to its demand. Over a long period, the size of the plant can be changed, unwanted buildings can be sold staff can be increased or reduced. The long run enables the firms to expand and scale of their operation by bringing or purchasing larger quantities of all the inputs. Thus in the long run all factors become variable.The long-run cost-output relations therefore imply the relationship between the total cost and the total output. In the long-run cost-output relationship is influenced by the law of returns to scale.In the long run a firm has a number of alternatives in regards to the scale of operations. For each scale of production or plant size, the firm has an appropriate short-run average cost curves. The short-run average cost (SAC) curve applies to only one plant whereas the long-run average cost (LAC) curve takes in to consideration many plants.The long-run cost-output relationship is shown graphically with the help of "LCA' curve.To draw on 'LAC' curve we have to start with a number of 'SAC' curves. In the above figure it is assumed that technologically there are only three sizes of plants - small, medium and large, 'SAC', for the small size, 'SAC2' for the medium size plant and 'SAC3' for the large size plant. If the firm wants to produce 'OP' units of output, it will choose the smallest plant. For an output beyond 'OQ' the firm wills optimum for medium size plant. It does not mean that the OQ production is not possible with small plant. Rather it implies that cost of production will be more with small plant compared to the medium plant.For an output 'OR' the firm will choose the largest plant as the cost of production will be more with medium plant. Thus the firm has a series of 'SAC' curves. The 'LCA' curve drawn will be tangential to the entire family of 'SAC' curves i.e. the 'LAC' curve touches each 'SAC' curve at one point, and thus it is known as envelope curve. It is also known as planning curve as it serves as guide to the entrepreneur in his planning to expand the production in future. With the help of 'LAC' the firm determines the size of plant which yields the lowest average cost of producing a given volume of output it anticipates.
MicroEconomics Which is true 1 when ap rises avc rises 2 when ap is rising avc falls 3 when ap is rising ap exceeds mp or 4there is no relationship between ap and avc?
When AP rises AVC falls
Why does the minimum point of avc curve lie to the right of minimum point of mc curve?
AVC=AC-AFC,the AVC curve is simply the vertical difference between the AC and AFC curve, AFC gets less, the gap between AVC andAC narrows.since all marginal costs are variable ,the same relationship holds between MC and AVC as it did between MC and AC ,that is ,when MC is less than AVC ,it must be falling, if MC is greater than AVC .it must be rising, so ,as with the AC curve ,the MC curve crosses the AVC curve at its minimum point
When was AVC Club Volleyball Championship created?
AVC Club Volleyball Championship was created in 1999.
