MC is the cost of producing one extra good, so if the cost of producing that one extra good is above the average, then the ATC increases.
When marginal cost is equal to average total cost, it means that the cost of producing one more unit is the same as the average cost of all units produced. This indicates that the firm is operating at its most efficient level of production.
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.
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 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.
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.
Average Product = (Total Product) / (Labor) Marginal Product(2) = (Total Product)(2) - (Total Product)(1)
When marginal cost is equal to average total cost, it means that the cost of producing one more unit is the same as the average cost of all units produced. This indicates that the firm is operating at its most efficient level of production.
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.
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 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.
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 the total product is increasing but at a decreasing rate, the marginal product will also decrease.
Negative
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
Find (i) the marginal and (2) the average cost functions for the following total cost function. Calculate them at Q = 4 and Q = 6.
true
Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity