Study guides

☆

Q: Does marginal cost always intersect average cost at minimum average cost?

Write your answer...

Submit

Still have questions?

Continue Learning about Economics

Explain why the marginal revenue(MR) is always less than the average revenue (AR)?

This is because if a marginal figure is less than an average figure, the new average figure will decrease.

When marginal cost is below average total cost, the cost of an additional unit is lower than the average cost of all the units, so it causes average total cost to fall. If marginal cost is greater, the cost of an additional unit is higher, so average total cost will rise. So when they are equal, it will stay the same. Think of it like your GPA. Say ATC=your GPA (the average of all your grades), and MC=the grade in your next course (one particular grade). If you have a B average and get a C in your next course, your GPA will fall (like when MC is lower than ATC). If you have a B average and get an A, your GPA will rise (like when MC is higher than ATC). If you get a B in your next course, there won't be any change because it's the same as the average (like when ATC=MC).

MC is the change in Tc divide by change in quantity. MC will always be negatively sloped and ATC has positively sloped.

marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.

Related questions

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.

marginal product is always decreasing the average is always above!.

If average product is decreasing then?

Just remember that marginal always leads average. Whatever the marginal product does the average will always do the same soon after.

Explain why the marginal revenue(MR) is always less than the average revenue (AR)?

This is because if a marginal figure is less than an average figure, the new average figure will decrease.

If two different lines intersect, they will always intersect at one point.

show with example that if the marginal product is always decreasing the average product is always above the marginal product?

Perpendicular lines always intersect and make 90 degree angles. Parallel lines never intersect with each other.

yes, because perpendicular lines always intersect. all lines intersect unless they are parallel or on separate planes (skew)

Some planes are parallel and don't intersect at all. Those that do intersect (and that are not coincident, i.e. the same plane) intersect in a line.

No. Lines can intersect at any possible angle.

People also asked