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What happens to average variable cost if the marginal cost is less than it?
If the marginal cost is less than the average variable cost, the average variable cost will decrease.
When marginal cost is less than the average total cost the average total cost is falling why?
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.
Why the marginal cost curve always cut the average cost curve at its lowest point?
This is because if a marginal figure is less than an average figure, the new average figure will decrease.
When the marginal cost is less than the average variable cost the average variable cost will?
decrease. Think about it this way, if you have a room full of people and you get their average height(average variable cost), and now each person that walks into the room(marginal cost) is shorter than the average, the average will drop.
Is falling when marginal cost is below it and rising?
When marginal cost is below average total cost, average total cost tends to fall, as each additional unit produced is less expensive than the average of previous units. Conversely, when marginal cost is above average total cost, average total cost rises, since producing additional units adds more cost than the average. Thus, if marginal cost is falling while it is below average total cost, it could lead to a further decrease in average total cost, while rising marginal cost above average total cost would increase it.
What happens to average variable cost if the marginal cost is less than it?
If the marginal cost is less than the average variable cost, the average variable cost will decrease.
When marginal cost is less than the average total cost the average total cost is falling why?
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.
Why the marginal cost curve always cut the average cost curve at its lowest point?
This is because if a marginal figure is less than an average figure, the new average figure will decrease.
When the marginal cost is less than the average variable cost the average variable cost will?
decrease. Think about it this way, if you have a room full of people and you get their average height(average variable cost), and now each person that walks into the room(marginal cost) is shorter than the average, the average will drop.
Is falling when marginal cost is below it and rising?
When marginal cost is below average total cost, average total cost tends to fall, as each additional unit produced is less expensive than the average of previous units. Conversely, when marginal cost is above average total cost, average total cost rises, since producing additional units adds more cost than the average. Thus, if marginal cost is falling while it is below average total cost, it could lead to a further decrease in average total cost, while rising marginal cost above average total cost would increase it.
What are benefits of marginal costing?
Marginal cost is the extra cost incurred in producing one unit of a product.If the marginal cost is more than average cost that means that costs are increasing and if it is less it means costs are decreasing.This way we find out how are business is progressing.
What is the relationship between marginal cost and total cost in the production process?
Marginal cost is the additional cost incurred by producing one more unit of a good or service. It is calculated by dividing the change in total cost by the change in quantity produced. Total cost, on the other hand, is the sum of all costs incurred in producing a certain quantity of goods or services. The relationship between marginal cost and total cost is that marginal cost affects the total cost by showing how much the cost increases when producing additional units. When marginal cost is less than average total cost, total cost decreases. When marginal cost is greater than average total cost, total cost increases.
If regulation of a monopoly results in a price equal to marginal cost but price is below average total costs?
efficiency in allocation will be less
Marginal revenue curve?
Explain why the marginal revenue(MR) is always less than the average revenue (AR)?
What is labor cost control procedure?
A procedure through which it is considered by keeping in view economics approach that the cost of labor does not increase its marginal product cost i.e. labor cost less than marginal cost.
If marginal revenue is less than average revenue will the demand curve be downward sloping?
This question reflects a fundamental misunderstanding of supply and demand. Marginal revenue and average revenue are related to a firm's cost function, and are thus connected to SUPPLY. They have nothing to do with a demand curve in classical economics, which is the marginal benefit to the CONSUMER of being in the market.
Why does the marginal cost curve cut through the average variable cost curve exactly at the minimum of the average variable cost curve?
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.
