as the total average cost is U shape the MC will intersect with U shape at lowest point to indicate the break even point where the company does not make neither profit nor loss. and this minimum point is known as the efficient scale that minimize the losses but does not maximize profit
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.
of average product.
Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.
This is because if a marginal figure is less than an average figure, the new average figure will decrease.
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.
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.
of average product.
Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.
This is because if a marginal figure is less than an average figure, the new average figure will decrease.
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.
when marginal revenue equal to marginal cost,when marginal cost curve cut marginal revenue curve from the below and when price is greter than average total cost
A perfectly competitive firm's supply curve is that portion of its' marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along it's marginal cost curve in response to alternative prices. Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, the firm's supply curve is also positively sloped.
Explain why the marginal revenue(MR) is always less than the average revenue (AR)?
A firm's short run supply 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
Margianal cost curve crosses the average total cost curve at the lowest point on the average total cost curve to be socially and ecomonical efficient.
Flase, The suuply curve of a "perfect competition" is its marginal cost curve