relation ship between average cost and marginal cost
marginal cost
Marginal cost comes from the costs of producing just one more of something.
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.
we can subtract the AVC and we will get the MC
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 cost
Marginal cost comes from the costs of producing just one more of something.
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.
we can subtract the AVC and we will get the MC
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.
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.
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.
Marginal cost - the derivative of the cost function with respect to quantity. Average cost - the cost function divided by quantity (q).
The main difference between standard cost and marginal cost is that in standard cost a target is set and in marginal cost there is no target set. Marginal cost is the change of the total cost due to the quantity produced.
The main difference between standard cost and marginal cost is that in standard cost a target is set and in marginal cost there is no target set. Marginal cost is the change of the total cost due to the quantity produced.
This is the economic distinction equivalent to fully absorbed cost of product and variable cost of product. Average cost is total cost divided by number of units. Marginal cost is the cost to produce the next unit (or the last unit
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