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as a marginal cost is the cost of the next product produced, if this is less than average cost, when you continue to produce more products the lower marginal cost will have an affect on the average and cause it to fall.

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โˆ™ 2009-04-20 20:59:07
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Q: When marginal cost is less than the average total cost the average total cost is falling why?
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6 If the average total cost curve is falling what is necessarily true of the marginal cost curve If the average total cost curve is rising what is necessarily true of the marginal cost curve?

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.


How do you find marginal average cost?

There is marginal cost and there is average cost but a marginal average cost makes no sense.


If you have total cost and total benefit how do you get marginal cost and marginal benefit?

Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity


Does marginal cost curve always intersect the average cost curve at the average cost curve's lowest point?

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.


If average total cost is greater than marginal cost average total cost must be increasing is the true or false?

true


Why average cost increase when marginal cost is increasing?

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.


Find the marginal and the average cost function for the following total cost function?

Find (i) the marginal and (2) the average cost functions for the following total cost function. Calculate them at Q = 4 and Q = 6.


Relationship between marginal cost and average total cost?

The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.


What is happening to average total costs when they equal marginal cost?

That is were u now got your total cost


What is the total cost if the marginal cost of producing the 9th unit is 10?

Total cost would be: (Average cost)*8 +10.


What Relation between marginal cost and average cost?

relation ship between average cost and marginal cost


What happens when the slope of the total revenue curve is equal to the slope of the total cost curve?

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

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