yes
Total variable costs are the sum of expenses which change proportionally as the price of services and goods fluctuate. The total marginal costs above produced units is also referred to as total variable costs.
Marginal cost = derivative of (Total cost/Quantity) Where Total cost = fixed cost + variable cost Marginal cost = derivative (Variable cost/Quantity) (by definition, fixed costs do not vary with quantity produced) Average cost = Total cost/Quantity The rate of change of average cost is equivalent to its derivative. Thus, AC' = derivative(Total cost/Quantity) => derivative (Variable cost/Quantity) = MC. So, when MC is increasing, AC' is increasing. That is, when marginal cost increases, the rate of change of average cost must increase, so average cost is always increasing when marginal cost is increasing.
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
Marginal cost is change in total cost due to increase or decrease one unit or output. It is technique to show the effect on net profit if we classified total cost in variable cost and fixed cost.
Total variable costs are the sum of expenses which change proportionally as the price of services and goods fluctuate. The total marginal costs above produced units is also referred to as total variable costs.
a. monopoly profit is maximized. b. marginal revenue equals marginal cost. c. the marginal cost curve intersects the total average cost curve. d. the total cost curve is at its minimum. e. Both A and B
when marginal revenue equal to marginal cost,when marginal cost curve cut marginal revenue curve from the below and when price is greter than average total cost
When average total cost curve is falling it is necessarily above the marginal cost curve. If the average total cost curve is rising, it is necessarily below the marginal cost curve.
Variable cost refers to the TOTAL variable cost of all units, whereas marginal cost is the variable cost of the last unit only. Variable cost is the sum of all the individual marginal costs. The derivative of the Variable Cost is the Marginal Cost. The integral of the Marginal cost is the Variable Cost.
When the marginal cost is below the average total costs or the average variable costs,then the AC would be declining.When marginal cost is above the average cost then the average cost would be increasing.Therefore the marginal cost should intersect with the average cost at the lowest point in order to pull the average cost upwards.
it will be parallel to horizantal axis
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Marginal cost curve cuts average cost (variable or total cost) at its minimum simply to portray the law of variable proportions. The idea is as labor is increased with capital being fixed, productivity increases upto a point and then decreases and later becomes negative. To relate the same productivity with average cost function, the average cost first decreases , reaches a minimum and then increases. Now marginal cost is just a change in the total cost. Logic says that when MC is less than AC productivity is favourable, thus cost is falling. When MC is more than AC productivity is not favourable and thus the rising portion of the cost curve. When MC = AC , the productivity that was reducing the average cost per unit has maximized and from then on starts rising cost(or decreasing productivity). That is the only point where they can intersect.
Characteristics of Perfectly Competitive Market: Free entry / exit (no barriers to entry) Firms produce homogenous products There is perfect knowledge of the market Many Seller and Buyers Seller is a passive price taker Marginal Revenue Curve = Average Revenue = Price = Demand Curve for individual firm. The curve is constant Marginal Cost Curve intersects both Average Variable Cost and Average Total Cost curves at their minimum point Profit Maximisation output level is when MR = MC (find intersect point and draw line down to Q axis)
Marginal cost is equal to the ratio of change in total cost or total variable cost to change in quantity of output. Marginal cost increases as total product increases since it reflects the law of diminishing marginal returns.
estimated cost
Ur probably in Farzads class... hah xD